Quantifying the Costs of Customers for Usage-Based Pricing

Abstract

This chapter focuses on the quantification of the customers' costs in communication networks, that is, how an operator should share the cost of the infrastructure among its customers. It reviews the cost of the network infrastructure and also how this cost is affected by the aggregate traffic of the customers. The chapter provides a metric, namely, discrepancy that quantifies the differences of cost-sharing policies. The first source of discrepancies in some cost allocation methods is the function that the operator uses to compute the contribution of the customers to the aggregate cost (i.e., F-discrepancy). The traffic metering method is the second source of the discrepancies (i.e., M-discrepancy). The third class of discrepancies is related to the total cost of ownership (TCO) of different devices of the network. The final type of discrepancies is caused by the different types of customer liability.