The Case for Quality of Service on Demand - Empirical Evidence from the INDEX Project

Abstract

In order to ensure further Internet growth and efficiently support quality-differentiated network services, users choice options have to go beyond different service plans that only reflect a rough market segmentation. To further subdivide these segments, choice options should provide the means to let users express their current needs by instantaneously selecting the service quality. This argument is strongly supported by empirical evidence from the Internet Demand Experiment (INDEX), a market trial for quality-differentiated Internet services. Arguing that the vast majority of Internet service plans for residential customers encourage waste and lead to user cross-subsidies, this chapter investigates user heterogeneity, activity heterogeneity, and acceptance of Quality of Service on demand to derive some consequences for Internet service provisioning and tariff design.