peter key peterkey@microsoft.com service differentiation: congestion pricing, brokers and bandwidth...

Peter KeyPeter Key

peterkey@microsoft.competerkey@microsoft.comhttp://research.microsoft.com/network/disgame.htmhttp://research.microsoft.com/network/disgame.htm

Service Differentiation: Congestion Pricing, Brokers and

Bandwidth Futures

Sine qua non ...

Differential Services / Differential Services / QOS QOS Differential Differential pricing!pricing!

Outline

BackgroundBackground Congestion PricingCongestion Pricing A game ….A game …. Commodity markets and FuturesCommodity markets and Futures

Access to / Control of Scarce Resources Airline seats, electrical power, economic Airline seats, electrical power, economic

wealthwealth Are networks any different?Are networks any different? Control technologies not independent or Control technologies not independent or

implementation /economicsimplementation /economics ATM: eg sensible relative tariffs, ATM: eg sensible relative tariffs,

CBR 1, VBR 2, ABR .1, UBR .01, … CBR 1, VBR 2, ABR .1, UBR .01, … result?result?

Resource system (‘network’)

Resource j

Capacity Cj

User /route r Ajr links users to resources

Freebyte

The network is free most of the time!The network is free most of the time! Only pay when busy (incremental cost, Only pay when busy (incremental cost,

small)small) … … aka Congestion Pricingaka Congestion Pricing

Send a signal to users when traffic that Send a signal to users when traffic that should not be carried enters (moveable should not be carried enters (moveable threshold)threshold)

Basic Idea

Users generate load (packets)Users generate load (packets) Network sends back signals (load dependent)Network sends back signals (load dependent) Signals : proportional to loadSignals : proportional to load

Act as feedback indicatorsAct as feedback indicators Represent pricing signalsRepresent pricing signals

marginal incremental costs (derivatives …)marginal incremental costs (derivatives …)congestion costscongestion costsreal money or virtual / distributed mintreal money or virtual / distributed mint

Matching Prices to Load

TheoremTheorem: : For linear increase multiplicative For linear increase multiplicative feedback flow control family, cannot have demand feedback flow control family, cannot have demand =capacity if prices are bounded for fixed capacity =capacity if prices are bounded for fixed capacity and arbitrary number number of flows.and arbitrary number number of flows.

IfIf prices are unbounded (bad!) then can have demand prices are unbounded (bad!) then can have demand capacity as number of flows increase, capacity as number of flows increase,

ElseElse: Match willingness to pay to price capacity: Match willingness to pay to price capacity

Sample Path Shadow Prices

C

1 2 3 4 5 6 7 8 9 10

Time

Capacity

pktsC slotted time

Shadow path shadow prices -buffered model

Time

Bu

ffer

Co

nte

nt

B

B

Pkts

Optimisation Framework (for fairness)

System optimum

rr txxUMax User optimum

rr

jr

jj

rr

xAy

yCxUMax

U C is cost function,eg

C y Cj j c h

Consistent set of taxes (prices) and load exist s.t. user opt = social opt.

unconstrainedjj

r r

dC

dy

U x t

Example - elastic control

tfwxx ttt 1

reflects willingness to pay, per unit time

is feedback received from the network tw

f t

if (resource/ bottleneck overloaded)

else 0tf t x

eg ,res on route

( )t t jj

f t x p load

Applications Virtual Private NetworksVirtual Private Networks Non-TCP appsNon-TCP apps

WebWeb MediaMedia

MBONE Tools, RealMedia, NetshowMBONE Tools, RealMedia, Netshow Real application uses (like a DB)Real application uses (like a DB)

Aggregates

All the channels in a VPN connectionAll the channels in a VPN connection Audio/Video/Data in a conferenceAudio/Video/Data in a conference ““Working set” for web serverWorking set” for web server Policy based routers/firewallsPolicy based routers/firewalls

Aggregates: Audio / Video

Policy

scheduler

NetworkUser/ end system

Network vs Users“My work is a game, a very serious game”

Escher

Users

Signals

Data/Info

Network

Flow Control and Marking Strategies

Definition: The phenotype of an individual plant or animal … or flow-control scheme … is a consequence of the interaction between its genotype and the environment in which it exists

Distributed Multi-player Game

Internet

MSRCambridge

Example Game

Transfer a given amount of data Transfer a given amount of data FF at at minimum cost in time minimum cost in time TT

Strategies:Strategies: CBR, CBR,

if stationary regime, optimal if price if stationary regime, optimal if price “convex” in region (lightly loaded)“convex” in region (lightly loaded)

else, have to predict fluctuations else, have to predict fluctuations

WTP vs TCP

The User interface …

Must be simple!

Guaranteed Flows / Streams?

Probabilistic guarantees OK, provided proportion Probabilistic guarantees OK, provided proportion of adaptive traffic adequateof adaptive traffic adequate

Just a question of risk - brokers (cf fixed rate Just a question of risk - brokers (cf fixed rate mortgages)mortgages)

Futures market:Futures market: a reservation is a (European) call option for a reservation is a (European) call option for

an amount of bandwidth, where fair price = an amount of bandwidth, where fair price = Integral of expected price over expected life-Integral of expected price over expected life-timetime

Bandwidth Exchanges

9 Inteconnection operators (clearing houses, 9 Inteconnection operators (clearing houses, brokers etc)brokers etc)

Band-X, London 1997 Band-X, London 1997 RateXchanges, anonymous,RateXchanges, anonymous,

PSTN voice, VOIP, b/widthPSTN voice, VOIP, b/width

Is Bandwidth Commodity?

commoditycommodity A physical substance, such as food, grains, and A physical substance, such as food, grains, and

metals, which is interchangeable with other metals, which is interchangeable with other product of the same type, and which investors product of the same type, and which investors buy or sell, usually through buy or sell, usually through futures contractsfutures contracts. . Or more generally, a product which Or more generally, a product which tradestrades on a on a commodity exchangecommodity exchange

Originally, basic, unrefined (wheat not flour)Originally, basic, unrefined (wheat not flour)

Commodity Markets

History repeats itself … (Fora Vendalia)History repeats itself … (Fora Vendalia) Japanese forward contract in 1730 for riceJapanese forward contract in 1730 for rice

In China 4000BC???In China 4000BC??? Chicago forwards 1833+, cash marketsChicago forwards 1833+, cash markets Standards (quality / quantity evolved …)Standards (quality / quantity evolved …) Options on futures, 1983Options on futures, 1983 Forward contracts aimed at delivery, now only a Forward contracts aimed at delivery, now only a

few % completefew % complete

Futures and Auctions

Market efficient? (Sorros ….)Market efficient? (Sorros ….) Commodity prices highly random (small Commodity prices highly random (small

trend) trend) Auctions: FCC holds b/width auctionsAuctions: FCC holds b/width auctions

Futures pricing

Assume current rate Assume current rate pptt

Fair price for European option at time Fair price for European option at time tt lasting expected time lasting expected time TT given current spot given current spot price s=price s=pp0, 0, (constant load) (constant load)

0

t T

t

t

E p p dt

Second Price Auctions

Suppose users are prepared to pay amount Suppose users are prepared to pay amount per packet, (eg fixed data, maximum cost), per packet, (eg fixed data, maximum cost), if price goes above this, will drop outif price goes above this, will drop out

In a mixed environment, those left pay this In a mixed environment, those left pay this clearing priceclearing price

ie Vickrey auction via congestion pricingie Vickrey auction via congestion pricing

TimescalesConnection

Reaction (RTT)

Packet Level

averagerate

Seconds

line rate

ms

s

Application Network

ms

s

Critical timescale

Critical timescales

Critical TimescalesThreshold Loading Leased line LAN Backbone

1 0.2 0.005 0 0.0000210 0.89 0.27 0.06 0.00145 0.984 5.1 1 0.017

180 0.997 81 17 0.27

Facilitators

Small buffers (compared to transmission Small buffers (compared to transmission delay)delay)

Target loads below 100% …Target loads below 100% … Simple feedback signal, eg ECN bit/byteSimple feedback signal, eg ECN bit/byte Signal reflects costs but …Signal reflects costs but … User interface simple (risk apportionment)User interface simple (risk apportionment)