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Measurement-Based Usage Charges in Communications Networks

Author

Listed:
  • Costas Courcoubetis

    (ICS-FORTH and Department of Computer Science, University of Crete, Greece)

  • Frank Kelly

    (University of Cambridge, Centre for Mathematical Sciences, Cambridge CB3 0WB, United Kingdom)

  • Richard Weber

    (University of Cambridge, Centre for Mathematical Sciences, Cambridge CB3 0WB, United Kingdom)

Abstract

We study usage-sensitive charging schemes for broadband communications networks. We argue that a connection's “effective bandwidth” is a good proxy for the quantity of network resource that the connection consumes and can be the basis for a usage charge. The determination of effective bandwidth can be problematic, however, since it involves the moment-generating function of the cell arrival process, which may be difficult to model or measure. This article describes methods of computing usage charges from simple measurements and relating these to bounds on the effective bandwidth. Thus we show that charging for usage on the basis of effective bandwidths can be approximated well by charges based on simple measurements.

Suggested Citation

  • Costas Courcoubetis & Frank Kelly & Richard Weber, 2000. "Measurement-Based Usage Charges in Communications Networks," Operations Research, INFORMS, vol. 48(4), pages 535-548, August.
    • Handle: RePEc:inm:oropre:v:48:y:2000:i:4:p:535-548
    DOI: 10.1287/opre.48.4.535.12424
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    References listed on IDEAS

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    1. Mackie-Mason, J.K. & Varian, H.R., 1993. "Pricing the Internet," Memorandum 1993_020, Oslo University, Department of Economics.
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    Cited by:

    1. Nihat Kasap & Hasan Hüseyin Turan & Hüseyin Savran & Berna Tektas-Sivrikaya & Dursun Delen, 2018. "Provider selection and task allocation in telecommunications with QoS degradation policy," Annals of Operations Research, Springer, vol. 263(1), pages 311-337, April.
    2. Constantinos Maglaras & Assaf Zeevi, 2003. "Pricing and Capacity Sizing for Systems with Shared Resources: Approximate Solutions and Scaling Relations," Management Science, INFORMS, vol. 49(8), pages 1018-1038, August.

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