Policy Research

Incentivizing Time Shifting of Data: A Survey of Time Dependent Pricing for Internet Access

Soumya Sen

Summary

The article attempts to analyze the increasing demand for data, especially mobile data, and compares various methods for preventing large degrees of data congestion. The article notes that current methods of congestion control such as pricing data by usage only partially alleviates congestion problems. The article brings up that in order to create efficient data usage, data needs to be charged based on the time it is being uses: this is called Time Dependent Pricing. Alternative methods of congestion control such as allowing individual companies to sponsor data usage for certain apps was discussed, however these were seen as contradictory to net neutrality which the article described as a negative. Overall, the article claims that current systems lead to large welfare losses.

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Policy Implications

This article can be used in possible efforts to regulate data provision industries such as mobile carriers. Many options for achieving congestion control via time dependent pricing were discussed. One simple alternative was to provide peak and off peak data usage hours with off peak being free or significantly reduced in price. This would a large shift in data traffic from peak to off-peak hours. Other methods were discussed such as live rate changes based on current congestion, tokens for data usage to be spent at various times with each having its own cost, bidding systems and others.