Pricing strategies for differentiated services content delivery networks

In order to reduce the user latency, the web sites disseminate some of their information to surrogate caches located closer to the users. We discuss a simple differentiated service type architecture for content delivery networks. A pricing scheme is next proposed to complement this architecture and provide fair service to the subscribed publishers. Then, we show that the suggested pricing scheme is also the optimal (revenue maximizing) pricing scheme for a monopolistic surrogate. We investigate the performance of the pricing scheme in a duopoly and show that under certain conditions the competition results in peering of the surrogates. Finally, we suggest methods to determine the optimal number of service classes offered to the users.