Various streaming services have been gaining much attention in the Internet. In order to reduce the investment cost many companies decide to offer the streaming by the use of the application-layer multicasting constructed on the top of an overlay network. In this paper we address the problem of overlay networks design. The main goal is to minimize the cost of access links selected for nodes participating in the application-layer multicasting. The second objective is to minimize the network delay, which is mainly caused in the Internet by inter-ISP (Internet Service Providers) transmissions. Therefore, in the optimization model the underlying network is composed of ISPs. The idea is to provide enough upload capacity within each ISP in order to reduce the number of links between ISPs. The optimization problem is formulated as an Integer Program. We use optimal methods (branch-and-cut algorithm included in CPLEX) as well as our own heuristic that yields results very close to optimum. Moreover, we use simulations to examine the tradeoff of the delay-aware approach in terms of the cost and the number of inter-ISP links.
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