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rate and blocking probability targets. Admission control for both stream and elastic ows would take account of the measured stream load and the current count of the number of active elastic ows. Simple head of line priority is suf cient to meet the delay requirements of stream traf c while per ow queueing is the perferred solution for elastic traf c. Fair queueing among elastic ows leads to fair bandwidth sharing. However, performance could be improved by implementing packet scheduling schemes giving priority to short documents. The performance of rate sharing schemes like fair queueing and SRPT does not appear to be adversely affected by the heavy-tailed nature of the document size distribution. For any given application, a user might choose to set up a stream or an elastic ow. The choice depends on quality of service and cost. We have argued that openloop control can meet the strict delay requirements of stream traf c while closedloop control provides higher throughput for the transfer of elastic documents. The issue of providing price incentives to in uence user choices is discussed in the next section (see also Odlyzko [24] and Roberts [27]). 16.5.2 The Impact of Charging
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For largely historical reasons, most users of the Internet today are charged on a at rate basis. They pay a xed monthly charge that is independent of the volume of traf c they produce, although the charge does depend on the capacity of their network access line. The major advantage of at rate pricing is its simplicity, leading to lower network operating costs. A weakness is its inherent unfairness, a light user having to pay as much as a heavy user. A more immediate problem is the absence of restraint inherent in this charging scheme, which may be said to contribute to the present state of congestion of the Internet. Network usage can be controlled by the introduction of usage sensitive charging with rates determined by the level of congestion. This is the principle of congestion pricing. Congestion pricing ideally leads to an economic optimum, where available resources are used to produce maximum utility. While theoretically optimal schemes like the ``smart market'' [23] are unlikely to be implemented for reasons of practicality, it has been argued that the congestion control objective can be acheived simply by offering a number of differentially priced service classes with charges increasing with the expected level of quality of service [28]. Users determine the amount they are charged by their choice of service class. They have an incentive to choose more expensive classes in times of congestion. Such schemes suffer from a lack of transparency: How can users tell if the network provider isn't deliberately causing congestion Why should they pay more to an inef cient provider Are they currently paying more than they need to, given current traf c levels Note that congestion pricing is not generally employed in other service industries subject to demand overloads such as electricity supply, public transportation, or the telephone network. An alternative is to charge for use depending on the amount of resources used per transaction, accounting possibly for distance (number of hops) as well as volume.
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We refer to such a charging scheme as transaction pricing. Transaction pricing is widely used in the telephone network (with the notable exception of local networks in North America), where switches and links are sized to ensure that congestion occurs only exceptionally. The price must be set at a value allowing the network operator to recover the cost of investment. Differential pricing according to the time of day is used to smooth out the demand pro le to some extent but this is not generally viewed as a congestion control mechanism. Choice between at rate pricing, congestion pricing, and transaction pricing depends among other things on their ability to assure the economic viability of the network provider. Congestion pricing is intended to optimize the use of a network, not to recover the cost of installed infrastructure, which is regarded as a ``sunk cost'' in the economic optimization. If the network is well provisioned and always offers good quality of service, for example, costs must be entirely recovered by at rate access charges. Transaction pricing has proved successful for telephone network operators, but then so has at rate pricing in the case of North American local networks. Transaction pricing has the advantage of distributing the cost of shared network resources in relation to usage. In addition to being appealing from a fairness point of view, this is in line with the trend in telecommunications for ``unbundling'' and cost related pricing. A second major issue is the complexity of implementing the different schemes. Any move from at rate pricing appears as a major change for the Internet, requiring accounting and billing systems at least as complex as those of the telephone network. The cost of such systems must be weighed against any expected improvements in ef ciency. In proposing a simple two-class model, we have in mind a mixture of at rate pricing and transaction pricing, where the role of the latter would be to allow users to be charged in relation to their use of shared resources. We argue [27] that, in a large network sized to offer good quality of service, resource provision is largely independent of whether the traf c is stream or elastic. This suggests a simple tariff based just on the number of bytes crossing an interface. A likely evolutionary step is that cost-related charging be introduced for large users, including ISPs connected to a backbone, with individual small users continuing to pay only a at rate charge. The simple service model makes no distinction between elastic documents like Web pages intended for immediate display and documents like mail whose delivery is deferable. Users do not require minimal throughput for the latter and would arguably expect to pay less for their transport. A possible solution is that deferable documents transit via servers, operated by a ``postal service,'' external to the transport network of routers and links. Users deliver a document directly to a local server, which then takes charge of forwarding it to its destination(s), generally via intermediate servers. The users pay the ``postal service,'' which in turn pays the transport network. The service is cheaper for end users because the servers can send data in off-peak hours and negotiate special tariff arrangements with the network provider.
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