Manuel Palacin (manuel.palacin@upf.edu)

12th November 2010

Content

Net Neutrality What is Net Neutrality? BEREC public consultation Search Neutrality

Network Interconnection Definition Types

Alternative Interconnections models BW Stock Market Scenarios Operators Action Plan Objective What is new in this approach Open questions

What is Network Neutrality? Network Neutrality is a principle that is

based on the network access providers can not prioritize access of contents to users or companies over others

The net neutrality does not prohibit the prioritization of flows according to the needs of users, but attempts to prevent access providers discriminate these flows based on content, origin or destination of traffic

i.e. If a network access provider reaches a financial agreement with Yahoo, it can prioritize this search over Google search. User access to Google website is not banned, but it will be so slower that the user could end up giving up and switching to another browser.

Conflict of

intere

sts

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BEREC Position

BEREC (Body of European Regulators for Electronic Communications) BEREC responses (30th Sept 2010) 14

questions http://www.erg.eu.int/doc/berec/bor_10_42.pdf

KEY problems that the resolution identifies if operators separate from neutrality principles: Discrimination and anticompetitive effects Long-term consequences in the Internet

economy Problems in transparency and QoS

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Other Point:Search Neutrality Net Neutrality is in the air, but what

happens with Searchers? Are neutral doing their searches or

discriminate depending on their interests?

Google was accused of modifying its Search Engine and GoogleAddWords to penalize some sites

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Network Interconnection Definition:

physical connection between a carrier's facilities and the equipment belonging to its customer

connection between two (or more) carriers

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Interconnection Types Peering - Bill And Keep

(BAK) Bilateral agreement signed by two

operators or ISPs to exchange traffic for their customers in pure reciprocity

Transit: An operator agrees to carry traffic

from another operator to a third operator or interconnection point

Calling Party Network Pays Calling operator (caller) pays the total

cost of point-to-point connection.

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Exists any Interconnection Alternative? Maybe an interconnection stock market? Operators offer ALL or EXCEEDED BW from

their networks with an associated QoS (LSA) Operators offer Dynamic BW Fares (LSA) in

real time for LONG or SHORT periods (hours, days, exact date)

The prices depend on the demand like in the stock market DYNAMIC

Operators subscribe to LSAs with better conditions tradeoff(LessPrice-BestQoS) in real time

Requires a new model of acquisition of BW more flexible REAL TIME

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BW Stock Market Based on supply and demand model using Revenue

Management (Airlines Business Model) Band Width stocks are from a limited period of time (hours,

days, ...) using LSAs Can be negotiated QoS (more complex than Best Effort) Maximize network usage to obtain better operating

performance. Objective: to occupy 100% of resources Can appear a new currency based in BW units instead of

money. A “Xbps” unit TODAY does not have the same value as YERSTERDAY or TOMORROW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW

BW STOCK MARKETLSAs:-1 Gbps BE 20-01 h: 500€-2 Gbps AF1 1/1/2011: 1000€

LSAs:-1 Gbps BE 20-01 h: 400€-2 Gbps AF1 1/1/2011: 1200€

LSAs:-1 Gbps BE 20-01 h: 600€-2 Gbps AF1 1/1/2011: 800€

TIME

SELLER OPERATORS

BUYEROPERATORS

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Scenarios (I) Mobile Market 2 proposals

Mobile Virtual Network Operator (MVNO) Buy FIXED BW Buy VARIABLE BW On Demand

Operators When an Operator is saturated or in NO coverage areas

Buy VARIABLE BW On Demand

Possible consequences: MVNO are not restricted to only 1 operator competence in prices MVNO can buy BW depending on their necessities granularity Operators can buy BW temporarily in saturated or NO coverage areas

Can detect new HOT POINTS to invest with new equipments Operators can find a new Business Opportunity selling BW to Third

Parties

BW STOCK MARKET

MOVISTAR ORANGE VODAFONE

75% 50% 80%25% 50% 20% Why don’t we

use this extra BW?

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Scenarios (II) Wired Market Many points of view

Access Networks Big operators

They are connected to their Core Networks Small operators

They are connected to their Core Networks They could need extra BW

Community operators They can have rigid agreements with one Operator They can buy BW on demand of different Operators

FTTH Town

ACCESS NETWORK

CORE NETWORK

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Scenarios (III) Wired Market Many points of view

Core Networks Big operators

Peering between operators of same traffic volume Offer BW stocks (instead of money) of their network to small

operators when passes through their “small” networks Small operators

Peering between operators of same traffic volume Buy BW slots of big network when passes through a bigger networks Use BW stocks to pay from previous agreements

International carriers They can offer variable BW prices but their prices maybe are NOT

competitive because they don’t have competence

BIG 1

SMALL 1

BIG 2

SMALL 2

CARRIER12

SMALL Operator Example

BIG 1

SMALL 1 BIG

2

SMALL 2

CARRIER

PEERING

BUY EXTRA BW from:BW Stock Market

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Operators action plan Peering between operators of same size

Used by Operators that passes more or less the same traffic amount

Transit between operators of different size Fixed and rigid agreements Easy to develop

BW Stock Market Dynamic agreements Difficult to develop

Transit vs. BW Stock Market Markets where prices are fixed/planned/regulated are less

elastic than dynamic ones based on supply/demand with competence

BW Stock Market will be better than transit only without mono Mixing Peering with BW Stock Market

Use peering when is possible and BW Stock Market when not or to obtain extra BW

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Objective

Competence

Reduce Prices

Demand Increases

Resources ~100%

Operator buys new resources(equipments, infrastructure, interconnectio

ns)

Expand MarketTelcos Providers, Manufactures, ...

Create MarketNew Possibilities New

Services

ECONOMICAL

More Employments

Evolution of Information

Society

SOCIAL

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What’s different/new in this approach? Network Brokers Studies are basically

negotiators of QoS in end-to-end connections that choose between fixed prices BW stock market proposes not how to negotiate

(because is the same ideatradeoff price/QoS), it aims for a dynamic BW market model

Operators are NOT putting BW prices in a dynamic and real-time way

Operators sellers could offer BW-slots for a determined time-interval varying the price Operators buyers could buy in advance because

they use a learning algorithm based on historical statistics

We can test if Revenue/Yield Management methodologies can fit in the BW business environments

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Open questions

Is this model more effective in terms of competition than Peering or transit? In which situations (small/big operators)?

Maybe can be used as a complement to these models for selling exceeded Band Width?

It is needed more than 2-3 interconnections points to avoid monopolies or oligopolies? Is it needed COMPETENCE to make run this model?

It is a sustainable model in terms of maintenance?

Will small operators, that cannot grow up, die? Will BW prices be reduced? Is this model creating more demand? Can interconnection agreements be done using

an hypothetic BW currency?17

Bibliography DYNAMIC EFFECTS OF NETWORK NEUTRALITY. Johannes M.

Bauer. Michigan State University. TPRC 2006 Draft Work Programme 2011 BEREC Board of Regulators. BEREC Response to the European Commission’s consultation

on the open Internet and net neutrality in Europe. BEREC The Evolution of Internet Congestion. Steven Bauer, David Clark,

William Lehr. Massachusetts Institute of Technology Internet Peering. Jean-Jacques Laffont, Scott Marcus, Patrick Rey,

Jean TiroleSource. The American Economic Review, Vol. 91, No. 2 Network Externalities, Competition, and Compatibility. Michael

L. Katz; Carl Shapiro. The American Economic Review, Vol. 75, No. 3 Two Papers on Internet Connectivity and Quality. Roberto Roson.

Dipartimento di Scienze Economiche, Università Ca’Foscari di Venezia Pricing and brokering services over interconnected IP

networks. D. Di Sorte, G. Reali.Dipartimento di Ingegneria Elettronica e dell’Informazione (DIEI), University of Perugia

Dynamic Price Competition with Fixed Capacities. Victor Martinez-de-Albeniz, Kalyan Talluriy. UPF and IESE

Pricing, Provisioning and Peering: Dynamic Markets for Differentiated Internet Services and Implications for Network Interconnections. Nemo Semret, Raymond R.-F. Liao, Andrew T. Campbell, and Aurel A. Lazar, Fellow, IEEE 18

Thank you!Any question?