A Strategic Pricing for Quality of Service (QoS) Network Business

In order to support emerging network businesses, such as Voice-over-IP (VoIP), virtual learning, video conferencing, and telemedicine, the Internet has to provide classes of service that are better than traditional ‘best-effort’ service. In computer networks, Quality of Service (QoS) is defined as the mechanisms that allow differentiation of network services based on their unique service requirements. To provide QoS over the current Internet, the Internet Engineering Task Force (IETF) and others have proposed a number of architectures, including Integrated Service (IntServ) and Differentiated Service (DiffServ). This research examines the basic issue of designing pricing models for Internet services at various quality levels. By formulating a pricing formula that is based on price-quality schema drawn from marketing theory, this research provides a unique approach to understand the pricing of Internet services. The pricing model in this research provides a flexible and dynamic capability to develop Internet pricing for upcoming digital economy.