A negotiation-based scheme for service level pricing for wireless access

The Next Generation Network (NGN) will enable service providers to offer broadband services with differentiated quality to their subscribers. In this way, the providers will be able to satisfy and retain the critical segment of the top-demanding customers, who generate the largest share of the provider’s revenues. However, service pricing is as important as service quality. In order to offer competitive prices, bilateral per service negotiation between the customer and the supplier is an interesting practical solution that can provide better results than rigid offers based on fixed price-rate lists. In the application scenario of Broadband Wireless Access, the supplier can adapt its offer of wireless access bandwidth to the dynamics of customer-generated traffic, giving more bandwidth per session when traffic is low and less bandwidth per session when traffic is high. We present and study the performance of an algorithm for automatic service level pricing in which two agents negotiate over the service transmission rate and the price on behalf of the user and of the provider. The performance of the proposed negotiation scheme is evaluated with simulations. The paper also compares our algorithm to the fixed-price scheme and to an auction-based strategy based on the Vickrey scheme.