FIND PI Meeting, November 2007 1 Value Flows and Risk Management Architecture for Future Internet Murat Yuksel [email protected] University of Nevada.

FIND PI Meeting, November 2007

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Value Flows and Risk ManagementArchitecture for Future Internet

Murat [email protected]

University of Nevada – RenoReno, NV

Aparna Gupta [email protected]

Shivkumar Kalyanaraman [email protected]

Rensselaer Polytechnic InstituteTroy, NY

Project Website: http://www.cse.unr.edu/~yuksem/contract-switching.htm

FIND PI Meeting, November 2007

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Implied ChallengesMotivation Current architectural

problems: Users cannot express

value choices at sufficient granularity – only at access level

Providers do not have economic knobs to manage risks involved in

investing innovative QoS technologies and

business relationships with other providers

flexibility in time:

forward/option pricing

flexibility in space:

user-defined inter-domain

routes

capability to provide e2e

higher quality services

money-back guarantees,

risk/cost sharing

FIND PI Meeting, November 2007

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Contract-switching: A paradigm shift…

Circuit-switching

Packet-switching

Contract-switching

ISPA

ISPC

ISPB

e2e circuits

ISPA

ISPC

ISPB routable

datagrams

ISPA

ISPC

ISPB contracts

overlaid on routable datagrams

FIND PI Meeting, November 2007

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A Contract-Switched Network Core

Contracts: a practical way to manage “value flows”

Technologies to Support QoS

Economic considerations for service definition and delivery

Scalability, Efficiency and Fairness

Contract timescales Cost recovery Pricing the risk in QoS

guarantees Single-domain and

end-to-end contracts

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Basic Building Block: Intra-domain dynamic contracts

Contract components performance component, e.g., capacity financial component, e.g., price time component, e.g., term

Network Coreaccessed onlyby contracts

Cu

stom

ers

EdgeRouter

EdgeRouter

EdgeRouter

EdgeRouter

EdgeRouter

EdgeRouter

Stations of the provider computing

and advertising local prices for edge-to-

edge contracts.

Stations of the provider computing

and advertising local prices for edge-to-

edge contracts.

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Contract Link An ISP is abstracted as

a set of “contract links”

Contract link: an advertisable contract

between peering/edge points i and j of an ISP

with flexibility of advertising different prices for edge-to-edge (g2g) intra-domain paths

capability of managing value flows at a finer granularity

than point-to-anywhere deals

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How to achieve e2e QoS? Contract Routing:

Compose e2e inter-domain “contract paths” over available contract links satisfying the QoS requirements

Calculate the contract paths by shortest-path algos with metrics customized w.r.t. contract QoS metrics

Two ways: link-state contract routing at macro time-scales path-vector contract routing at micro time-scales

Monitor and verify that each ISP involved in an e2e contract path is doing the job

Punish the ISPs not doing their job, e.g. as a money-back to the others involved in the e2e contract path

FIND PI Meeting, November 2007

8Link-State Contract Routing: Macro-level, proactive

User X

2

3

5

ISPA

ISPC

ISPB

1

OwnerISP

Link QoS Term OfferedAfter

Price

A 1-2 10Mb/s 2hrs 1hr $10

A 1-3 40Mb/s 5hrs 15mins $80

B 2-4 100Mb/s 3hrs 2hrs $110

C 3-5 20Mb/s 1hr 30mins $8

C 4-5 60Mb/s 1day 5hrs $2504

Most cost-efficient route

Max QoS route

FIND PI Meeting, November 2007

9Path-Vector Contract Routing: Micro-level, on-demand, reactive

Provider initiates…

User X

2

3

5

ISPA

ISPC

ISPB

1 4

[C, 5-4, 30Mb/s,

45mins, $9]

[C-B, 5-4-2, 20Mb/s, 45mins, $6+$5]

[C-B-A, 5-4-2-1, 20Mb/s, 30mins, $7.3+3]

[C, 5-3, 10Mb/s, 30mins, $5]

[C-A, 5-3-1, 5Mb/s, 15mins, $1.25+$1.2]

pathannouncement

path

announcement pathannouncement

FIND PI Meeting, November 2007

10Path-Vector Contract Routing: Micro-level, on-demand, reactive

User initiates…

User X

2

3

5

ISP A

ISPC

ISPB

1 4

[5, A-B, 1-2-4, 15-20Mb/s, 20-30mins, $4]

[5, A, 1-2, 15-30Mb/s, 15-30mins, $8]

[5, 10-30Mb/s, 15-45mins, $10]

[5, A, 1-3, 5-10Mb/s, 15-20mins, $7]

Paths to 5 are found and ISP C sends replies to the user with two specific

contract-path-vectors.

path request path request

path request

[A-B-C, 1-2-4-5, 20Mb/s, 30mins]

[A-C, 1-3-5, 10Mb/s, 15mins]

Paths to 5 are found and ISP C sends replies to the user with two specific

contract-path-vectors.

replyreply

reply

FIND PI Meeting, November 2007

11Putting it together: Contract routing + Financial engineering

End-to-end QoS services

Contract Routing Pricing Risk management

tools Spot contracts Forward contracts Options on Forward

Flexibility to innovate services

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Contingent-claim Pricing of Contracts

Outcomes of a fundamental risk N outcomes

Market’s collective view of current worth of future outcomes

Contingent Claim pays off should a specific outcome be realized in future

i – Price of a contingent claim, i Current value of a pay-off obtained

should outcome i be realized in future Price of a complex payoff(V) = .

V In continuous setting – state price

density

[1, 0, .., 0]

[0, 1, .., 0]

[0, 0, .., 1]

[1, , .., ]

.

.

.

.

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Single-domain QoS Contract Pricing and Money-back

Pricing Advertisable Contracts: with focus on

Cost recovery Congestion sensitive Promoting utilization

Pricing QoS Guarantees: applies financial engineering technique

Uses state-price density or contingent claims for underlying risk

Money-back Guarantees: for advertisable contract

Utilizing risk pooling concepts of insurance benefits

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Temporal Extensions of Single-domain QoS Contracts

Bail-out Forwards: on advertisable spot contracts

between peering/edge points i and j of an ISP

with flexibility of advertising different forward prices for edge-to-edge (g2g) intra-domain paths

Forwards with provision for Bail-out conditioned on network congestion

Spot and Forwards concatenated to create long-term contracts

Time

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Spatial Composition for End-to-end QoS Contract Pricing

Macro-level Contracts: centralized concatenation of contract links

Globally optimal path between a source-destination (s-d) pair

Optimize for price given required QoS characteristics and contract duration

Micro-level Contracts: decentralized concatenation of contract links

Locally optimal short-term concatenation of contract links

Constrained to satisfy QoS requirements

S

D

Micro-levelService

Macro-levelService