What Is Congestion Pricing?

Congestion pricing is also called usage-based pricing, that is, its price is composed of two parts: fixed connection cost and dynamic pricing based on the state of the network when it is used.

Congestion pricing

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Congestion pricing is also called usage-based pricing, that is, its price is composed of two parts: fixed connection cost and dynamic pricing based on the state of the network when it is used.

Congestion pricing is also called usage-based pricing, that is, its price is composed of two parts: fixed connection cost and dynamic pricing based on the state of the network when it is used.

The dynamic pricing price when the network is used is called the congestion price. When the network transmission status does not reach a certain threshold, the congestion price is defined as a lower value; when the threshold is exceeded, each data packet transmitted will be based on the network congestion and the quality of service provided by the user. Factors such as the calculation of the resource usage on the relevant path through which the network transmits the data packet are calculated, and the corresponding congestion price is calculated with the goals of maximum overall user satisfaction and optimal resource utilization. Its pricing model can be a priority model, a flexible market model, or a basic service model.

The advantage of congestion pricing is that the utilization of network resources is better and fairness can be achieved. MCI Communications in Chile, New Zealand and the United States use this pricing method.