Internet of Things, future networks, and the economics of virtual networks

Abstract

The Internet of Things (IoT) gains momentum. Developments regarding smart grids, intelligent transportation systems, and low-power networks for smart cities constitute significant drivers in the evolution of network industries. IoT creates an array of new requirements for information and communications technology (ICT) data transmission: In addition to real-time and data geopositioning, new service characteristics result from the change of the traditional sender–receiver perspective of Transmission Control Protocol/Internet Protocol (TCP/IP) to content relevancy for many users (e.g. cloud computing) and dynamic changes of the state of devices. The future development and success of IoT hinges critically on the provision of heterogeneous quality of service (QoS) requirements which cannot be provided by best-effort TCP/IP Internet. It is thus not surprising that both in the US and the EU network neutrality regulations are currently being reconsidered. Alternative network logistics (virtual networks) dealing with heterogeneous QoS requirements of network traffic may require fundamental deviations from traditional Internet architectures. Corresponding logistics operating over joint physical infrastructures gain increasing attention under the heading of future networks (FNs). The goal of this article is to focus on the economic mechanisms of how the potentials of QoS differentiation in the context of FNs can be fully exploited and incentivized within innovative all-IP-based QoS traffic architectures.