Transcript bandwidth exchanges

Trading Transport Resources
of Communication Networks
on Bandwidth Exchanges
W. Stańczuk, J. Lubacz, E. Toczyłowski
Warsaw University of Technology, Poland
e-mail: [email protected]
Outline
• Current bandwidth trade patterns
• Bandwidth exchanges: opportunities
and challenges
• A model for trading bandwidth links and paths
• Features of the model
• Summary
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Bandwidth as a traded good
• Evolution of telecom market:
– increased number of players
– different business roles and models (network operators, service
providers, content providers, etc.)
• Changing network architecture (NGN)
– connectivity layer
 Bandwidth becomes a commodity
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Bilateral trading – the still prevailing model
• Drawbacks:
– time consuming negotiations
– significant market players can extort better conditions
– difficulties in trading complex bandwidth products
(e.g. sub-networks)
 Need for multilateral trade patterns – bandwidth exchanges
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Bandwidth exchanges
• Marketplaces for many buyers and sellers
– exchange operator matches offers in an „optimal” way
– opportunity for fast and transparent contracting
– wide range of possible organizational forms
• First real-world implementations:
– late 90’: Band-X, RateXchange, Enron Communications
– Arbinet (500 active clients), Merkato (real-time IP bandwidth trading)
– traded products: network links (SONET/SDH, voice minutes, IP transit)
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Challenges
• Commoditization of bandwidth
– lack of standards for bandwidth contracts
and QoS
• Fast bandwidth delivery
– automated switching in transport networks (GMPLS/ASON) not
ubiquitous
• Exchange models
– principles of bandwidth pricing still fuzzy
– fuzzy business models for trading bandwidth products
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A new model for market offer matching
is proposed
• an application of general multi-commodity trade model to
communications networks
• description of operations of a bandwidth exchange
• provides optimal bandwidth allocation between many
buyers and sellers
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Essential features
of the proposed model (1)
• Traded commodities:
– network links (sell)
– network paths (buy)
• Bandwidth allocation criteria:
maximization of market welfare
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Essential features
of the proposed model (2)
• Bandwidth offered for sale can be allocated to many network paths
• Demanded bandwidth can be realized in the form of many network
paths
• Exchange operator sets paths according to current offers
• Bandwidth allocation principle:
– joint optimization of many elementary buy and sell offers in order
to maximize market welfare (multi-commodity optimization)
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The model
• the commodities are expressed as elementary market offers with
two parameters:
– bandwidth capacity
– offer price
• buy offer d: a link (or a path regarded as a link) [hd,Ed]:
• hd - the maximal bandwidth capacity the buyer wants to purchase
• Ed - the maximal acceptable unit price of bandwidth
• sell offer e: a path [ye,Se]
• ye - the maximal capacity the seller is willing to sell
• Se - the minimal acceptable unit price of bandwidth
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Market clearing principle
• Market welfare: sum of surplus of all market transactions
– global optimality and individual rationality
– a transaction: bandwidth contract between one sell offer with one
buy offer
– the welfare can be expressed as: (total offered value of
bandwidth bought) - (total offered value of bandwidth sold):
Q
E x  S x
d
d
d
e
e
e
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The formulation of the model

ˆ
Q  max 

E x  
d
d
d
e

S e xe 

v  sd
 xd ,

a
x

v  sd , td , v V , d  D
0,

ve ed
eE
 x , v  t
d
 d
x
ed
 x e , e  E
d D
0  xd  hd ,
d  D
0  xe  y e ,
e  E
0  xed , e  E, d  D
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Features of the model
• maximizes the global economic welfare: for given offers, no better
allocation of bandwidth resources is possible (criteria: market
welfare)
• „transparency” and fairness conditions of clearing
• any competitive (giving higher welfare) offer is always selected for
realization
• mathematical formulation of the problem is linear, thus tractable
even for large networks
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Trading paths and links
vs only links: higher welfare
• buy and sell offers only for links:
– welfare: Q=5.0
– bandwidth allocation:
path AB for d2
d2: 2/5
B
1/5
1/5
d1: 3.5/5
A
C
• applying the model:
– welfare: Q=7.5
– bandwidth allocation:
path ABC for d1
B
5
A
Trading Transport Resources of Communication Networks on Bandwidth Exchanges
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C
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Efficient allocation of network bottleneck
resources
• resources are allocated to buy offers that bring higher
welfare in global scope
A
C
– local offer d3
not realized
– welfare: Q=10
– bandwidth allocation:
path AEFC for d1,
path BEFD for d2
d1: 4/5
1/5
5
5
1/5
d3:51.5/10
E
1/10
5
5
1/5
F
5
1/5
d2: 4/5
B
D
• the price for a bottleneck resource reflects its „network”
value
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Summary
• The presented model:
– allocates bandwidth offered by many sellers to many buyers balancing
market supply and demand
– provides optimal market welfare
– is linear, so tractable even for large-scale networks
• Future extensions of the model needed
– capacity modularity
– complex bandwidth offers (e.g. bandwidth capacity in some range, subnetworks, resource bundles)
– network multi-layer issues
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Personal details:
Name:
Wojciech
Surname:
Stańczuk
Company:
Warsaw University of Technology
E-mail:
[email protected]
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