Revenue Maximization for Broadband Service Providers Using Revenue Capacity

Broadband Internet service providers (ISPs) are for-profit companies: they provide high-speed Internet service to customers in order to maximize revenue. Their revenue depends on prices they are able to charge the customers, which in turn depends on the data rates provided. This paper defines the `revenue capacity´ of a communication channel as the maximum revenue an ISP can achieve by allocating data rates to customers, given an exogenous price function and an underlying physical-layer model. Revenue capacity is the maximum revenue for the ISP constrained only by the physical-layer limitations of the multiuser channel under the assumption that the ISP can dictate data rates to its customers. This paper proposes an algorithm to compute the revenue capacity for multiuser Gaussian channels with staircase price functions, and to produce feasible data rates achieving the revenue capacity. The paper concludes with an analysis of incremental migration of VDSL to vectored VDSL, quantifying the increase in revenue capacity with the increase in the percentage of vectored users.