Title: Top Percentile Network Pricing and the Economics of Multi-Homing 

Speaker: Hanoch Levy*


Abstract

Under multi-homing an Internet Service Provider (ISP) connects
to the Internet via multiplicity of network providers. This allows
the provider to receive proper quality of service when one of
the networks fails. An ISP that uses multi-homing is subject
to extra charges due to the use of multiple networks. Such
extra costs can be very drastic under fixed cost pricing and
non-meaningful under per-usage pricing. This work deals with
the question of how large are these costs under top-percentile
pricing, a relatively new and popular pricing regime. We provide a
general formulation of this problem as well as its probabilistic
analysis, and derive the expected cost faced by the ISP. 
We numerically examine several typical scenarios and demonstrate
that despite the fact that this pricing aims at the peak traffic
of the ISP (similarly to fixed cost), the bandwidth cost of
multi-homing is not much higher than that of single-homing.

* Joint work with Joseph Levy and Yaron Kahana