Market driven network neutrality and the fallacy of a two-tiered Internet traffic regulation

Within a Generalized DiffServ architecture entrepreneurial flexibility for build-ing intelligent multipurpose traffic architectures enables the provision of a varie-ty of tailored traffic services for a wide range of heterogeneous application ser-vices. In order to solve the entrepreneurial traffic capacity allocation problem, we propose an incentive compatible pricing and quality of service (QoS) differ-entiation model for the Generalized DiffServ architecture resulting in market driven network neutrality. Optimal allocation decisions based on the opportunity costs of capacity usage require that all relevant traffic classes are taken into ac-count simultaneously, rather than 1) excluding traffic classes (by means of min-imum traffic quality requirements), 2) prescribing a maximum or minimum number of traffic classes or 3) arbitrarily including parameter specifications for or levels of QoS which are not reflected by demand side. It is particularly im-portant that the opportunity costs of capacity reservations for deterministic pre-mium traffic classes are interrelated with subsequent non-deterministic traffic classes. As a consequence, every form of market split would be artificial.