Abstract. We consider the problem of constructing a proxy-based overlay skeleton tree (POST) in the backbone service domain of a two-tier overlay multicast infrastructure. Spanning all multicast proxies deployed in the overlay backbone, POST acts as an efficient resource sharing platform for supporting large numbers of concurrent multicast sessions, without the need of tree computation for each individual session. The problem is concerned with deciding an appropriate deployment of multicast proxies in the overlay backbone, upon which we wish to find an optimal POST solution so that the maximum end-to-end latency is minimized subject to degree balancing constraints. This problem is shown to be NP-hard. We present a simple heuristic method for deploying multicast proxies, and devise a low complexity greedy algorithm for optimizing the end-toend latency and degree distribution of POST. Simulation experiments confirm that our proposed approach yields good quality approximate solutions th...