Pricing models for network services


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Table of Contents

Pricing models for network services


Some thoughts...

Some thoughts… (cont.)

Correct view on charging


Network services


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Network Services

Network Transport Services

Service Contracts

Network Contract Types

Guaranteed Services

Guaranteed Services (cont.)

Elastic Services

Network Control

Network Control for Various Contract Types

Time scales of network control


Label Switching

Control for connection-oriented services

Congestion and flow control

Network Management

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ATM Forum Service Categories

ATM Forum Real-Time Service categories

ATM Forum Non-Real-Time Service categ.


Available Bit Rate (ABR) Services

IETF Integrated Services Architecture

IETF Integrated services (cont.)

IETF Differentiated Services Architecture

IETF DS Architecture (cont.)

IETF DS Architecture (cont. )

IETF DS Architecture (cont. )

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Call Admission Control (CAC)

Acceptance region

Simplifying the problem of CAC

Loading an elevator with boxes

Loading an elevator (cont.)

Loading an elevator (cont.)

Loading an elevator (cont.)

Effective bandwidth of traffic streams

An effective bandwidth formula

Operating point parameters s,t

Multiple QoS constraints

Effective bandwidth for MPEG-1 traffic

Effective bandwidth for Ethernet traffic

A proposal for pricing


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The context

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The basic model: the consumer

The demand curve

The demand curve (cont.)

Economic models and tariffs

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The unifying social surplus formulation

The supplier

The social planner’s problem

Marginal cost prices

Recovering network cost

Two-part tariffs

Ramsey pricing

Ramsey pricing (cont.)

Perfect competition

Monopoly: an example


Price discrimination

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Sharing finite resources

Sharing finite resources (cont.)

Maximizing SW with congestion cost

Maximising SW with no congestion cost

Price discrimination and usage charging

Time-of-day pricing

Congestion pricing for delay

Summary of results (finite capacity)

Consistency issues in pricing services

Cost-based pricing

What is cost?

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Regulation and information models

Principal-agent model

Price regulation

Price regulation (cont.)

Regulation and competition

Regulation and competition (cont.)

Entry deterrence and unbundling

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Flat rate pricing

Flat rate pricing (cont.)


Cross-subsidization (cont.)

Flat rate and tiered quality

Charging elastic and best-effort services


Basic concepts

Basic concepts (cont.)

Basic concepts (cont.)


Congestion pricing

Computing congestion prices

Implementation approaches

Smart markets

Proportional fairness

Proportional fairness (cont.)

Proportional fairness: implementation

Sample path shadow prices

Proportional fairness: implementation (cont.)

Comparing with current Internet

Evolution of proportional fairness

Possible user control algorithms


Charging Guaranteed Services


The problem

Economic theory reminder

Which is the right effective bandwidth?

The time-volume scheme

The worst eb given time and volume

An interesting structural property for tariffs

Simple Charging Scheme for VBR

Properties of Simple Charging Scheme

Examples of Tariffs

Simple Time-Volume scheme for ABR


Final remarks

More topics

Splitting of traffic

Discouraging splitting - fixed charge

Discouraging splitting of traffic (cont.)

Improving accuracy of Simple Charging Scheme

Taking into account leaky bucket constraints

More general charging schemes

More general charging schemes (cont.)

Simpler Charging: Dispensing with Duration

Charging CBR Services

Charging PVCs

Charging and CAC


Closely related references

Closely related references

Closely related references (cont.)

Closely related references (cont.)

Closely related references (cont.)

Other references

Other references (cont.)

Other references (cont.)

Other references (cont.)

Technology background

Some thoughts...

Author: ***


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