Analysis of content charge by ISPs

When rich content is delivered, a huge amount of traffic is transmitted over the network. For ISPs, the increase in investment cost that is required to maintain stable quality is a problem. ISPs need content providers to cover the investment cost because increase in the user fees may not be accepted by the users. However, content providers usually pay an access fee where the increase ratio diminishes as the volume of the data transmitted increases. Therefore, ISPs cannot obtain enough profit to cover the required investment costs. For this problem, content charge, in which ISPs charge content providers for each content delivery, seems effective. This work models the business relationship between ISPs and content providers, and we investigate the conditions for introducing the content charge by the ISPs. We also investigate the effects of content charge on the revenue of the ISPs by numerically comparing the content charge and the transit charge. We show that major ISPs in Japan can expect to increase their monthly income from about 100,000 USD to about one million USD when the charging ratio of content charge is set to 20%.