# Presentation: 672508

## Internet Economicsperspective onAccounting & Billing

- john.schnizlein@cisco.com

## “Middleware” requirements emerge

- Between network (routers) and economics
- Today - statistics collection
- counting bytes and packets
- more detail than calls despite greater economy
- more RAM for accounting than for traffic in device
- data movement and management
- Open questions for the future
- what to measure?
- how to control?
- network economics research guidance

## Outline

- Internet Economics
- Call - Integrated Service
- Access Rate
- Differentiated service
- Billing and Rationing
- Congestion
- Which mechanisms should we provide?

## Internet Economics

- Economic efficiency v. network efficiency
- Economic theories
- cost when not congested is zero
- price at marginal cost of expansion
- axiomatic analysis of fairness
- Practical reality
- usage constraining more important than usage
- pricing at edges

## Smart Market

- User puts bid into each packet
- Routers queue based on bids
- Highest-bid packet dropped due to congestion sets the price for all packets
- Feasibility?
- bid field in packet
- authority to bill
- how to apply across multiple routers and domains

## Reservations

- Usage billing as with telephone calls
- Based on duration and capacity
- QoS as reserved
- Bill for reservation rather than use to discourage over-reserving
- COPS provides accounting and control
- Integrated Services Internet (RSVP) scaling concerns

## Access Rate

- Maximum rate based on access circuit
- Measured maximum with access-circuit size miss-matching need (e.g. UUNET)
- automate peak measurement?
- Controlled maximum rate
- Committed Access Rate
- Better than total volume pricing
- encourages shifting to off-peak use

## Price per bandwidth

**Kbps**

**   ****$**

- Data source: November 1997
-  www.zdnet.com/icom/zdlabs/superguide

**Notes:**
how to present to SPs
present billing strategy to customer as 
multi-phased, 
evolutionary and revolutionary
from what Cisco offers today (better than competition)
to end-game 6-months, 12-months, 18-months
how to present internally
AMA/AMATPS, traditional telco is important but don’t undersell need to explore/innovate (see “Extensions”)
how to present to billing partners
Cisco hands off aggregated/mediated/correlated data to partner in common, easy to adopt, formats
partner generates turnkey billing solutions

## Price per bandwidth commodity dial

**Kbps**

**   ****$**

- $20
- flat-rate dial-up

**Notes:**
how to present to SPs
present billing strategy to customer as 
multi-phased, 
evolutionary and revolutionary
from what Cisco offers today (better than competition)
to end-game 6-months, 12-months, 18-months
how to present internally
AMA/AMATPS, traditional telco is important but don’t undersell need to explore/innovate (see “Extensions”)
how to present to billing partners
Cisco hands off aggregated/mediated/correlated data to partner in common, easy to adopt, formats
partner generates turnkey billing solutions

## Differentiated Service

- Assured Service
- Premium Service
- Settlement
- Smart Market approximation
- Integrated and Differentiated Services

## Differentiated Services

- Clark’s Assured Service
- mark in-profile traffic for better-than-best-effort
- RED with In-Out (RIO)
- Cisco CAR and WRED can do this
- Jacobson’s Premium Service
- priority queue for premium low-latency
- strict policing to provisioned rate
- Diff-serv WG for DS-byte per-hop behavior

## WRED

**Average**
**Queue **
**Depth**

**High ****Priority**

**Interface**
**Maximum**
**Threshold**

**Assured**
**Service**
**Profile**

**Probability **
**of Packet ****Discard**

**Adjustable**
**Slope**

**Low ****Priority**

**Notes:**
Cisco has extended the excellent capabilities of RED to apply to multiple traffic classes via a new feature called Weighted RED (WRED).  WRED allows the service provider to establish a RED profile per traffic class.  This profile includes minimum threshold, maximum threshold and discard probability parameters.  Thus, during periods of congestion, premium packets can be given better treatment by establishing a lower minimum threshold for standard packets (and possibly a lower discard probability).  In adition, we have developed a high-performance distributed implementation of this (and the other features) that scales to DS3 per VIP on the VIP2-40 and OC3 per VIP on the VIP2-50.

Two Service Levels are Shown; Up to Six
Can Be Defined

## Approximate Smart Market

- Per-domain bidding server
- Compress bids to DS field in the IP header
- Policy controls authorize payment
- Still needs an indicator of dropped traffic
- How to settle between domains?

## Billing-Rationing Service

- Some subscribers need fixed bills
- fixed budgets
- Token bucket based service
- payment fills the bucket
- rationing of premiums to avoid exhaustion
- Interactive billing-payment fits future vision of electronic commerce

## Congestion Billing

- Marginal cost is zero unless congested
- All the above methods do not address non-responsive flows
- RED measures congestion
- account in the core
- mark for accounting at the edge
- Billing for waste

## Summary of concepts

- Different QoS implies different prices
- Billing should fit the type of communication
- duration and capacity for calls
- peak rate or congestion for shared packet delivery
- Economic control loop around the TCP control loop to avoid congestion

## Questions (1)

- How important are fixed regular bills to subscribers?
- Can those needs be met adequately with rate-limited interfaces?
- Will subscribers choose rationing in order to combine usage-priced services with fixed bills?

## Questions (2)

- Would enough subscribers choose a measured peak rate billing option for the peak computation to be worthwhile implementing in the router interface?
- Are there enough subscribers who value low-cost, best-effort service to justify the development of congestion billing systems?

## Questions (3)

- Would any service provider actually deploy a system in which users bid for priority protection from congestion?
- If under development, how many levels of precedence are needed?How are packets marked?