Achieving optimal revenues in dynamically priced network services with QoS guarantees

We have previously proposed the use of dynamically priced network services to provide QoS guarantees within a network. End-to-end QoS can be achieved by concatenating several of these services, perhaps from different ISPs. In this paper we consider the problem of a single ISP determining the bandwidth to allocate to each service, and on which path, in order to maximize revenue while guaranteeing end-to-end QoS. No knowledge of demand functions is assumed. Optimal allocation of bandwidth to services is first considered, where services are assumed to be routed on predetermined paths. We define the Iterative Allocation Adjustment heuristic, based on the concepts of tatonnement, which, through simulation, is shown to achieve over 95% of the optimal revenue for an ISP. We also examine how to value the links in the network to identify rerouting possibilities, or possible routes for new services, in order to improve the revenue of an ISP. (c) 2007 Elsevier B.V. All rights reserved.