2 Network Services and Contracts It is useful to distinguish between ‘higher-level’ and ‘lower-level’ services. Higher-level services are those that interface directly with customers. Lower-level services are those that customers use indirectly and which are invisible to them. Consider, for example, the Internet as it is used by students and staff of a university. One higher-level service is email; another is web browsing. Web browsing uses the lower-level service of Internet data transport to exchange data between users’ terminals and the servers where web pages reside. The quality of the higher-level web browsing service depends on the quality of the lower-level transport service. That is, the speed at which web pages will be delivered to users partly depends on the quality of the network’s data transport service. This will be specified in a contract between the university and the network. A transport service can be defined in many ways. It can be defined in terms of a guarantee to transport some amount of information, but without any guarantee about how long this will take. It can fully specify the performance that is to be provided, and do this at the start of the service. Alternatively, it can respond to changing network load conditions, and continuously renegotiate some qualities of the information transfer with the data source. We investigate these possibilities in this chapter. Finally, we note that the provision of a service involves not only a flow of information, but also a flow of value. Flow of information concerns data transport, whereas flow of value concerns the benefit that is obtained. One or both parties can benefit from the flow of value. However, if one party enjoys most of the value it is reasonable that he should pay for the service. For example, if an information server sends a customer advertisements then the information flow is from server to customer, but the value flow is from customer to server, since it is the advertiser who profits. This suggests that the server should pay. If, instead, the customer requests data from the server, then value flows to the customer and so the customer should pay. Note that it is neither the initiator of the transport service, nor the one who sends information that should necessarily pay. This chapter is about various characteristics of services, independently of charging issues. In Section 2.1 we discuss a classification of the network services according to different characteristics. We also provide a primer to present technology, in which we explain the characteristics of the most common network service technologies. Please note that the figures that we quote for various parameters, such as SONET’s maximum line speed of 10 Gbps, are continually changing. The concepts that we present do not depend on such parameter values. In Section 2.2, we discuss generic issues Pricing Communication Networks: Economics, Technology and Modelling. Costas Courcoubetis and Richard Weber Copyright  2003 John Wiley & Sons, Ltd. ISBN: 0-470-85130-9 24 NETWORK SERVICES AND CONTRACTS related to contracts for network services, focusing on issues of quality of service and performance. 2.1 A classification of network services At its most basic level a network provides services for transporting data between points in the network. The transport service may carry data between just two points, in which case we have a unicast service. Or it may carry data from one point to many points, in which case we have a multicast service. The points between which data is carried can be inside the network or at its periphery. When a web server connects with a user’s browser then both points are at the periphery. When an access service connects a customer’s terminal equipment to the network of a different service provider then the customer’s point is at the periphery and the point connecting to the different service provider’s network is inside. When a network interconnects with two other networks then both points are inside. Thus network operators can buy or sell transport services amongst themselves and collaborate to provide transport services to end-points residing on different networks. We see all these things in the Internet. For simplicity, we often refer to a large collection of cooperating networks that provide a given transport service as ‘the network’. 2.1.1 Layering Service layering is common in communication networks. A higher layer service consumes lower layer services and adds functionality that is not available at the lower layers. Services of various layers can be sold independently, and by different service providers. An example of a higher layer service is an end-to-end transport service that connects customer equipment at two periphery points of the network. This service uses lower layer services, some of which are strictly internal to the network; these lower layer services provide connectivity between internal nodes of the network and the access service that connects the users’ equipment to the network. The end-to-end service may perhaps add the functionality of retransmitting information lost by the lower-level services. A simple analogy can be made by considering a network of three conveyor belts. One connects node A to node B. Two others connect node B to nodes C and D. Suppose that each conveyor belt is slotted and provided with fixed size bins that move with the belt. Parcels are inserted into the bins so that they do not fall off the belts while travelling. In order to provide an end-to-end service from A to C and D, some additional functionality is needed. For instance, bins travelling between A and B might be coloured red and blue. Parcels arriving in a red bin at node B are assigned by a clerk to continue their journey on the conveyor belt from B to C, whereas parcels in the blue bins continue on the conveyor belt from B to D. Clerks are needed to read the destination addresses, fill the different colour bins on the conveyor belt, and empty the bins that arrive at nodes C and D. Of course there are other ways to build the same end-to-end service, for instance, we could use bins of just one colour on the belt from A to B, but have a clerk at node B check the destination address of each arriving parcel to decide whether it should next be placed on belt BC or BD. A key feature of this setup is the layering of services: one or more companies may provide the basic conveyor services of conveyor belts AB, BC and BD, while another company provides and manages the bins on top of the conveyor belts. Yet another company may provide the service of filling and emptying the bins (especially A CLASSIFICATION OF NETWORK SERVICES 25 if bins are a single colour and the destination address of the parcels must be checked at point B). Thus, our setup has three layers of service. The first layer is the conveyor service AB. In Internet terms it is analogous to an access service, which connects the equipment of customer A to the network B by, say, a dial-up connection. Typically, an Internet service provider provides the other two layers of service (of running the conveyors internal to the network, and managing and filling the bins on the conveyors, including the access part). Sometimes, a third party provides all three layers of service in the access part. Let us illustrate these concepts in more depth by briefly describing transport service layering in an actual example from the current Internet. We view the Internet as a single network using layers of different technologies. Further treatment of these services is provided in Section 3.3. 2.1.2 A Simple Technology Primer The basic Internet transport service carries information packets between end-points of the Internet in much the same way as the post office delivers letters. Letters that are going to the same city are sorted into large mail bags, which are loaded onto airplanes, and then delivered to a central point in the destination city. The letters are then regrouped into the smaller mail bags that postmen can carry on their routes. Just as the post office uses airplanes, vans and foot, and different size containers and mail bags, so Internet transport service uses many different transport technologies. These include Ethernet, Asynchronous Transfer Mode (ATM), Synchronous Digital Hierarchy (SDH), Synchronous Optical Network (SONET), and Dense Wavelength Division Multiplexing (DWDM). These technologies are described in Sections 3.3.2–3.3.5. We introduce the basic technologies in an informal way that motivates their particular use. For the moment, we emphasize the fact that each of the above technologies provides a well-defined transport service and packages information in different size packets. The packets of one service may act as containers for packets of another service. Suppose, for simplicity, that the post office transports fixed size packets between customers. A transport company provides a container service between local post offices at A and B by running small vans of fixed capacity at regular intervals between A and B. Prior to the departure of a van from A, the local post office fills the van with the packets that are waiting to be delivered to the post office at B. Such a service is a paradigm of a synchronous container service, since it operates at regular intervals and hence offers a fixed transport capability between point A and B. The SONET or SDH services are examples of synchronous services in communications networks. If each van can hold at most k packets then the unit of information transfer between points A and B is a container of size k. If a van departs every t seconds, then the capacity of the container service is k=t packets per second. (For data, we measure capacity in bits per second, or kilobits, Megabits or Gigabits per second.) Observe that containers may not be filled completely, in which case the extra space is wasted. We can extend this type of synchronous container service by supposing that the transport company uses larger vans, of container size 10k, again leaving every t seconds. These containers can be filled by smaller ‘subcontainers’ of sizes that are multiples of k, and customers can rent such space in them (provided that the sum of the sizes of the subcontainers does not exceed 10k). The post office could obtain the same service as before by renting a subcontainer service of size k. Similarly, an operator running a 622 Mbps SONET service between points A and B can 26 NETWORK SERVICES AND CONTRACTS sell four distinct 155 Mbps SONET connections between these points (after reserving two of the 622 Mbps to control the connection). What happens if customers cannot effectively fill the smallest size subcontainers? Say the post office traffic between points A and B has a maximum rate of 0:5k=t packets per second, and so can justify using containers of size at most 0:5k, but there are other potential customers who can also use fractions of k. Then there is a business opportunity for another operator, who buys the k container size service from the original operator and reserves space in each such container for his customers. This is a ‘value-added’ service, in the sense that he may reserve a different maximum amount of space for each customer, fill the unused space of one customer with excess traffic of another customer, and is able to distinguish packets belonging to different customers when the container is unpacked. The equivalent of this ‘smart container packing’ service is an ATM virtual path service. A simple case of container packing is to reserve a fixed portion of the space to each customer. For instance, an ATM service provider using the 155 Mbps SONET service between points A and B, can provide two independent ATM virtual path connections of sizes 55 and 100 Mbps that may be sold to different customers. Basically, he can flexibly construct any number of such fixed bandwidth bit pipes based on the actual demand. Again notice that a customer such as the post office which buys the above fixed bandwidth service may not fill the capacity of the service at all times. There are more interesting ways that ATM can pack the containers to avoid unused space. In these cases, the virtual paths do not have a fixed static size but can dynamically inflate or deflate according to the actual number of packets that are being shipped. In the above, the post office plays an analogous role to IP. Since the local post office at B may not be the final destination of a packet, but only an intermediary, the post officer at B must look at each packet in turn and decide whether to deliver it locally or forward it to another post office location. This is the functionality of the IP protocol: to distinguish packets belonging to different customers and deliver them or route them effectively through the other ‘IP post offices’. A customer delivering packets at random irregular intervals to the IP post office (destined for some other customers) views the IP service as building a flexible ‘packet pipe’ through the network that does not reserve some predetermined amount of bandwidth. Note that such connections may have highly variable durations, and their end-points may be unpredictable as far as the IP service is concerned. In its turn, the IP service provider can sell a number of such packet connections between points A and B (or the capability for activating such connections), by making certain that there is only a small probability of completely filling the fixed bandwidth service that he purchases from the ATM service provider between A and B. Now statistics come into play. Since most of the time only a small number of the IP connections will be sending packets simultaneously, say a fraction p of the total number n, he needs only enough bandwidth between A and B to accommodate pn sources, assuming that these send continuously. Note the large saving in bandwidth compared to what he would need if he were to reserve the maximum bandwidth needed by each source, that is, enough bandwidth for n such sources instead for pn. This controlled overbooking is an effect of statistical multiplexing discussed in Section 4.2. It is important to observe that fixed bandwidth services can be used for achieving the reverse effect of flow isolation. For instance, if the IP service needs to assign dedicated bandwidth for a packet connection between A and B, then rather than mixing these packets with IP packets from other connections in the same containers, it can purchase a dedicated container service, solely for carrying the packets it wishes to isolate. Such flow isolation may be used to guarantee good performance, since shared containers have fixed A CLASSIFICATION OF NETWORK SERVICES 27 ATM virtual path IP flows SONET connection Light path Figure 2.1 A transport service layering hierarchy. Light paths and SONET (SDH) provide large synchronous bit pipes. ATM further divides these pipes, and allows connections to use capacity that is temporarily unused by other connections. IP is used to establish connections between arbitrary network end-points, of unpredicted duration and intensity. size and packets may have to queue at the IP stations to find free space in containers. This congestion effect is reduced by offering such an exclusive treatment, but comes at an extra cost. We are ready now to proceed with the Internet analogy. In the late 1990s, many parts of the Internet were implemented as IP over ATM. ATM can run over SDH (or SONET), which in turn can run over an optical network. This transport service layering is shown in Figure 2.1. More specifically, an optical network technology provides a point-to-point synchronous ‘container’ service, such as SONET operating at a maximum steady rate of 10 Gbps. In turn, SONET provides subcontainer transport services with rates that are multiples of 155 Mbps. ATM is used to provide flexible partitioning of such large SONET containers for services that require fractions of this bandwidth. IP is responsible for packing and unpacking the fixed size bandwidth services provided by ATM into information streams consisting of variable size objects (the IP packets produced by user applications), whose resulting bit rates are much smaller and bursty. IP is a multiplexing technology that ‘buys’ such fixed size bandwidth services and makes a business of efficiently filling them with information streams that are variable in both the rate and size of packets. Thus, IP and ATM can be viewed as ‘retailers’ of ‘wholesale’ services such as SONET. Different parts of the overall network may be connected with different container technologies. The idea is to choose a technology for each link whose container size minimizes wasted space in partially packed containers. In the interior of the network many traffic streams follow common routes and so it makes sense to use large containers for links on these routes. However, at the periphery of the network it makes sense to use small containers to transport traffic from individual sources. Thus the business of a network operator is to provide connectivity services by choosing appropriately sized containers for the routes in his network, and then to efficiently pack and unpack the containers. The Internet transport service efficiently fills the large fixed size containers of the lower-level services and connects two end-points by providing a type of connecting ‘glue’. Example 2.1 (IP over ATM over SONET) A concrete example of transport service layering is shown in Figure 2.2. In this figure Provider 1 aims to fill completely his 622 Mbps container service between points K and L. He may be buying a light path service from a provider who owns the fibre infrastructure between the above points, in which the container service could run up to 10 Gbps. He fills his containers by selling 28 NETWORK SERVICES AND CONTRACTS IP packets A 622 Mbps containers (SONET) B F L H E GK C D 100 Mbps ATM VP service 155 Mbps containers (SONET) 55 Mbps ATM VP service Provider 1: network K−L, Provider 2: network G−H, Provider 3: network E−F Figure 2.2 An example of transport service layering. Transport service Provider 1 operates a 622 Mbps SONET service between points K and L and sells 155 Mbps SONET services to customers. Provider 2 runs an ATM over SONET network with nodes G, H , and sells a 100 Mbps ATM service between points E and F to Provider 3; to do this he buys a 155 Mbps SONET service for connecting G and H from Provider 1. Provider 3 sells IP connectivity service to customers A, B, C and D by connecting his routers E and F using the 100 Mbps ATM service bought from Provider 2. smaller container services, in sizes that are multiples of 155 Mbps, such as that which connects nodes G and H of Provider 2. Provider 3 sells Internet services to his customers and runs a two node IP network between routers at E and F. In doing this, he must connect these nodes so that they can exchange Internet data. This data is packaged in variable size IP packets and is sporadic, with a total rate not exceeding 100 Mbps. To connect E to F he buys a 100 Mbps ATM Virtual Path (i.e. a 100 Mbps bit pipe) from Provider 2. Provider 2 uses the ATM technology to subdivide the 155 Mbps SONET container service between G and H, and so sell finer granularity bandwidth services. For instance, he fills the rest of the 155 Mbps containers traversing the F to G link by selling a 55 Mbps ATM connection to some other customer. Note that if Provider 3 has enough Internet traffic to fill 155 Mbps containers, he can buy a pure SONET service between points E and F, if available. This is what happens in IP over SONET. If he has even more traffic, then he can buy a light path service to connect the same points, which is IP over ½. Such a service may provide for 10 Gbps of transport capability for IP packets. Note that bitrate is not the only differentiating factor among transport services. The IP network E–G allows any pair of customers amongst A; B; C and D to connect for arbitrarily short times and exchange data without the network having to configure any such connections in advance. By contrast, SONET (and ATM) are used for specific point-to-point connections that have a much longer lives. Finally, each service that is sold to a customer has initial and final parts that give access to the provider’s network. For instance, in order to run the ATM service between E and F one must connect E to G and H to F. This access service may be provided by Provider 2 himself or bought from some third provider. Similarly, IP customer A must use some access service to connect to the IP network of Provider 3. 2.1.3 Value-added Services and Bundling Some services provide much more than simply a data transport service. Consider a web service. It provides a data transport service, but also a data processing service and a data presentation service. The latter two services add value and belong to a layer above that A CLASSIFICATION OF NETWORK SERVICES 29 of the transport service. Thus, the web browsing is what we call a value-added service, which is complementary to the network transport service. Similarly, an Internet telephony service is a bundle of services, which includes a directory service, a signalling service, a data transport service and a billing service. In Section 3.6, we discuss a possible model for Internet services and explain the structure of the value chain in Internet service provisioning. It is important to distinguish between transport and value-added services. Think of a bookstore which provides the value-added service of retailing books by mail order. A customer chooses his books and says whether he wishes delivery to be overnight, in two business days, or by ordinary post. He pays for the books and their delivery as a bundle, and the bookstore contracts with a delivery service for the delivery. The bundled service has components of attractiveness and timeliness of book offerings, speed of delivery and price. The demand for books drives the demand for the delivery service. Similarly, the demand for information services drives the demand for data transport services. How a customer values the particular content or functionality of a communications service determines the charge he is prepared to pay. Of course, this charge will contain a component that reflects the value of the data transport service, since transport service is what a communications network provides. In Figure 2.3 the user enjoys a video on demand value-added service. Although the customer may make a single payment for the service (to download the software required, run the application and watch the movie at a given quality level), this payment may be further split by the valued-added service provider to compensate the transport service provider for his part of the service. It is useful to familiarize oneself with some of the formal definitions that regulators use to classify network services. The Federal Communications Commission (FCC) uses the term information services for value-added services, and telecommunications services for lower- level transport services. The Telecommunications Act of 1996 defines telecommunications as “the transmission, between or among points specified by the user, of information of the user’s choosing, without change in the form or content of the information as sent and received”, and a telecommunications service as “the offering of telecommunications for a fee directly to the public, or to such classes of users as to be effectively available to the public, regardless of facilities used”. An information service is defined as “the offering of a capability for generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making available information via telecommunications”. According to these definitions, an user network application programs application interface transport service transport service interface add value to transport service video player network IP interface communications socket exchange application data video server Figure 2.3 Transport and value-added services. The user enjoys a value-added service (such as watching a movie) which combines the transport of data from the video server with the content itself, and probably some additional functionality from the video server (such as back-track, fast-forward and pause). Such an application may require some minimum bitrate in order to operate effectively. 30 NETWORK SERVICES AND CONTRACTS entity provides telecommunications only when it both provides a transparent transmission path and it does not manipulate the form or content of the information. If this offering is made directly to the public for a fee, it is called a ‘telecommunications service’. An entity may sell an information service as a bundle of telecommunications (the lower-level data transport services) with content specific applications such as email and web browsing (the valued-added services according to our previous definitions), or sell telecommunications separately as independent services. According to this definition, telecommunications refers to the lower end of the network transport services, where the network offers transparent bit pipes. When, as with TCP/IP, data is processed either inside the network at the routers, or at its edges, the resulting service is closer to an information service according to this definition. In practice, information services are more usually viewed as being associated with content and value-added applications that run at the edges of the network. In the Internet, such applications manipulate the data part of the IP packets according to the particular application logic. Network transport, such as the routing of IP packets, is not considered a valued-added service, as it is offered as a commodity, using open standards. In this book, we deal with network transport services that complement these higher-level, value-added applications. By the FCC definitions they are ‘telecommunications services’ at lower layers and ‘information services’ at higher layers. 2.1.4 Connection-oriented and Connectionless Services We may also classify services by the way data is transmitted. In a connection-oriented service, data flows between two nodes of the network along a ‘virtual’ pipe (or a tree of virtual pipes when multicasting, with duplication of data at the branching points). Data travels along a fixed route, with a specified rate, delay and error rate. In a connectionless service, the data does not follow a fixed routing. Instead, the data is transmitted in packets, or datagrams. Successive datagrams, travelling between a source and destination, can take different routes through the network, and can suffer loss. Connection-oriented and connectionless services may not be substitutable. It is more difficult, or impossible, for a connectionless service to deliver datagrams in a regular way. Take, for example, the postal service, which is a datagram service. It ensures that parcels can be sent to a destination from time to time, with acceptable delay. However, it cannot guarantee delivery of a stream of parcels to a destination at a constant rate, say one per hour. That would require a connection-oriented approach in which a flow of packets is treated as a separate entity. A schematic of connection-oriented and connectionless services is shown in Figure 2.4. A connection-oriented service can be used to provide a type of deterministic performance guarantee. Consider a connection and a link of the network that it uses. Suppose we reserve periodically reoccurring slots of time on this link for transmission of the connection’s packets. It is as if the link were a conveyor belt, and a fixed portion of the belt were reserved for carrying the connection’s packets. Each time that portion comes around one of the connection’s packets can be sent. We assume that slots are large enough to carry an integral number of packets. In practice, packets may be fragmented into small fixed size pieces (called cells), where a slot of the synchronous link (the belt) is large enough to hold a cell. Slots reoccur, being part of larger constructs called frames. For instance, a particular connection might be assigned the first two slots in a frame consisting of hundred slots, such that every hundred slots the connection gets the first two slots. Packets are reconstructed at the end from the corresponding cells. If the connection sends a stream of packets at a A CLASSIFICATION OF NETWORK SERVICES 31 (a) (b) M A C R Mbps A B B C Figure 2.4 Connection and connectionless services. Connection-oriented services have the semantics of a directed virtual bit pipe (or perhaps a tree). Connectionless services have the semantics of a datagram service (perhaps to multiple destinations). In (a) a connection-oriented service connects A to B and C with a bit pipe of R Mbps, maximum delay T and bit error rate r. In (b) a connectionless service delivers a message of size M to B and C with maximum delay T and loss probability p. constant rate, and sufficient time slots are reserved on all the links that it uses, then its packets will arrive at the destination at that same constant rate. Such a transport service is called a synchronous service. An important characteristic of synchronous service is that the relative timing of packets at the entrance is preserved at the exit. This is in contrast to an asynchronous service, which makes no such static allocation of slots to connections. Slots are allocated on demand, only when cells are present to be carried. A key characteristic of asynchronous service is that the relative timing of packets at entrance and exit is not preserved. However, we can have reservation of resources (at possibly less than maximum rate) even for asynchronous services (e.g. ABR with MCR, VBR, etc.). For instance, we may specify that every 100 slots, the connection should be able to get at least one slot (if it has cells waiting to be transferred). Note that no particular slot is reserved solely for use of the connection. Continuing the conveyor belt analogy, when a packet is to be placed on a belt there must be an empty slot, but specific slots on the belt are not pre-allocated to connections. If there is contention for slots, then the connections must wait for the network to assign them free slots. The network does this using some ‘contention resolution policy’. We define synchronous networks as those that support only synchronous services. They use technology that is optimized for this purpose, breaking information into packets of the size that can be transmitted in a slot and then sending them as streams of slots while reserving specific slots for each connection on the links that the connection uses. In contrast, packet switching (or cell switching) technology is used for asynchronous services. Information is broken into variable or fixed-sized packets, called cells. These are transported in a store-and-forward manner, without preallocating any slots. Examples of synchronous networks are ISDN (Integrated Services Digital Network), SDH and SONET. Examples of asynchronous networks are the Internet, Frame Relay and ATM. Note that a synchronous service can be provided by an asynchronous network (such as a CBR service in ATM) by performing smart scheduling of the slots. This is used for running telephony over ATM . Clearly, if customers send data sporadically then a synchronous service may be inefficient, since preallocated slots can go unused. Asynchronous services are better. Note that because of the sporadic nature of asynchronous services it may be sensible for the network to engage in some sort of ‘overbooking’ when assigning resources to slots. For instance, one may assign a number of slots that is less than what would be required to support the peak rate of the connection. 32 NETWORK SERVICES AND CONTRACTS 2.1.5 Guaranteed and Best-effort Services There is an important distinction between services that do and do not come with guarantees, and which correspondingly do and do not require some reservation of resources. On the one hand, guaranteed services come with quality of services guarantees that are expressed in terms of certain parameters of the service’s performance. Some reservation of resources is usually required if the guarantees are to be fulfilled. For example, a service that guarantees a minimum transmission rate may need to reserve capacity on a set of links. On the other hand, a service may make no guarantees and reserve no resources; in this case, the performance of the service depends on the quantity of resources it is allocated, and this allocation depends on the network’s policy and the set of other services that compete for resources. Since the network usually tries to provide the best quality it can to each of its customers, these services are called best-effort services. Service guarantees may allow some flexibility. For example, it might be guaranteed that no data will be lost if the user’s sending rate never exceeds h, but subject to the network being allowed to vary the posted value of h. For more details see Section 2.2.1. This type of flexibility can help the network to improve efficiency by making better use of resources. The request for a network service originates at an application, and so it is the application’s needs that determine the type of connection required to exchange information. For example, a video server needs a minimum bandwidth to send real-time video and so needs a guaranteed service. Other audio and video applications can tolerate performance degradation and can adapt their encoding and frame rates to the available bandwidth. They are examples of elastic applications. For these, flexible guarantees may be acceptable. Note that an elastic application must know the bandwidth that is available at any given time and be able to adapt its rate, rather than risk sending information into the network that may be lost. Thus application elasticity goes hand-in-hand with the network’s ability to signal resource availability. Elastic services require this signalling ability. Best-effort services usually do not provide signalling and so elastic applications must implement this signalling functionality themselves (at the application layer). Thus guaranteed services, which provide flexible guarantees, such as in the example above, may be better suited to some adaptive applications. Example 2.2 (Traditional Internet transport services) The Internet Protocol (IP) is the basic protocol by which packet transport services are provided in the Internet. It operates as a simple packet delivery service. When the IP ‘representative’ (a piece of software) at the source machine is handed a packet of data and the address of a destination machine (an IP address), it forwards this packet tagged with the IP destination address to ‘colleagues’ (IP software) running on Internet computers (the routers). These continue to forward and route the packet until it reaches the IP representative at the destination machine. If the network is congested, then packets may be lost before reaching their destination. This happens when a packet arrives at a router and overflows the available storage. This classic IP service is a best-effort service, because it provides no performance guarantees. Today’s router implementations permit certain IP packets to receive priority service. However, no explicit guarantees are provided to the flows of such packets. TCP (Transport Control Protocol) and UDP (User Datagram Protocol) are two transport services that run on top of the IP service, and so are denoted by TCP/IP and UDP/IP. The TCP/IP protocol provides a data transport service with certain performance guarantees. It guarantees zero packet loss to the user by retransmitting packets that are lost because of [...]... cannot choose them directly By pricing the dynamic contract parameters, the network gives users the incentive to purchase smaller values of them As prices tend to infinity, the network ends up needing to fulfil only the minimal static part of contract Depending on the pricing mechanisms available, prices may vary over timescales of seconds to months For example, time-of-day pricing operates over a timescale... the tariff specified in the contract 2.3 Further reading A simple tutorial on SLAs has been prepared by Visual Networks, Inc and Telechoice (2002) See also the simple article on SLAs at the web site of AT&T (2000) A rather advanced slide presentation on important SLA implementation issues for IP networks is published by Cisco (2002b) Two more interesting white papers are those of Cisco (2001) and (2002e)... that thus far we have equated packet loss with congestion The network does not generate explicit signals of congestion, but rather the user receives implicit signals when he detects packet loss In some networks, such as those using wireless links, packet loss can occur FURTHER READING 39 because of transmission errors, rather than congestion This can cause TCP to reduce its rate even if there is no congestion.)... great value to those applications that would sometimes prefer to pay a bit more, rather than see their traffic trimmed by the leaky buckets Multimedia applications may fall in this category High capacity networks, serving large numbers of contracts, gain from the fact that traffic streams do not always fully utilize their contracts It is possible that the provision of a more flexible service contract does... Cisco (2002b) Two more interesting white papers are those of Cisco (2001) and (2002e) Some concrete examples of Service Level Agreements for ATM and Frame Relay can be seen at the web sites of Nortel Networks (2002a) and (2002b) The concepts of network service layering and quality of service are covered in the classic networking textbooks of Walrand (1998), Walrand and Varaiya (2000) and Kurose and . such parameter values. In Section 2.2, we discuss generic issues Pricing Communication Networks: Economics, Technology and Modelling. Costas Courcoubetis. residing on different networks. We see all these things in the Internet. For simplicity, we often refer to a large collection of cooperating networks that provide