A pricing scheme to maximize social welfare in communication networks

In this paper, we analyze switching from the current flat-rate Internet pricing to adopt usage-based pricing schemes. Even if flat rate pricing is one of the main reasons for the success of the Internet, the only way to prevent network congestion, differentiate services and maximizes social welfare is to adopt usage-based pricing schemes. Our scheme is highly related to an optimal congestion and cost-sharing pricing scheme for multiclass services applied to communication networks developed by Yezekael Hayel, Bruno Tuffin and design a pricing scheme that maximizes the social welfare which is the total gross value minus the total expected delay cost.