A market-based bandwidth charging framework

Abstract

The increasing demand for high-bandwidth applications such as video-on-demand and grid computing is reviving interest in bandwidth reservation schemes. Earlier attempts did not catch on for a number of reasons, notably lack of interest on the part of the bandwidth providers. This, in turn, was partially caused by the lack of an efficient way of charging for bandwidth. Thus, the viability of bandwidth reservation depends on the existence of an efficient market where bandwidth-related transactions can take place. For this market to be effective, it must be efficient for both the provider (seller) and the user (buyer) of the bandwidth. This implies that: (a) the buyer must have a wide choice of providers that operate in a competitive environment, (b) the seller must be assured that a QoS transaction will be paid by the customer, and (c) the QoS transaction establishment must have low overheads so that it may be used by individual customers without a significant burden to the provider. In order to satisfy these requirements, we propose a framework that allows customers to purchase bandwidth using an open market where providers advertise links and capacities and customers bid for these services. The model is close to that of a commodities market that offers both advance bookings (futures) and a spot market. We explore the mechanisms that can support such a model.