Usage-based charging for Internet usage: A case study

In this paper we discuss usage-based pricing for networks offering best effort services, and review the international experience in the above subject. We propose an approach that is based on the assumptions that a) the fixed part of the charge should reflect a fair distribution of the actual fixed network cost to the users of the network and b) the usage charge should be directly associated with the congested link in order to provide for the economically optimal sharing of the scarce resources. The usage part of the charge is proportional to the traffic volume that a user contributes on the congested links Of the network over a specific time period. Our case study involves the design of the actual tariffs offered by the OR-net to its customers, which consist of the Greek Universities and Research Institutes.