Contract-Switching Paradigm for Internet Value Flows and Risk Management

1. Contract-Switching Paradigm for Internet Value Flows and Risk Management Murat Yuksel yuksem@cse.unr.edu University of Nevada – Reno Reno, NV Aparna Gupta guptaa@rpi.edu Shivkumar Kalyanaraman shivkuma@ecse.rpi.edu Rensselaer Polytechnic Institute Troy, NY Project Website: http://www.cse.unr.edu/~yuksem/contract-switching.htm

2. Motivation Implied Challenges flexibility in time: forward/option pricing • 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 space: user-defined inter-domain routes capability to provide e2e higher quality services money-back guarantees, risk/cost sharing

3. Inter-domain struggles… When crossing domains, all bets are off.. End-to-end reliability or performance-criticality requires assurance of single-domain performance, i.e., “contract”s efficient concatenation of single-domain contracts Inter-domain routing needs to be aware of economic semantics contract routing + risk management We address translation of these struggles to architectural problems 3

4. ISP B ISP A ISP B ISP C routable datagrams ISP A ISP C ISP B contracts overlaid on routable datagrams ISP A ISP C Contract-switching: A paradigm shift… e2e circuits Circuit-switching Packet-switching Contract-switching

5. 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

6. 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. Edge Router Edge Router Edge Router Customers Network Core accessed only by contracts Edge Router Edge Router Edge Router Basic Building Block: Intra-domain dynamic contracts • Contract components • performance component, e.g., capacity • financial component, e.g., price • time component, e.g., term

7. 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

8. 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 guarantee to the others involved in the e2e contract path

9. Link-State Contract Routing: Macro-level, proactive Most cost-efficient route ISP B 2 ISP A 1 4 User X 3 ISP C 5 Max QoS route

10. Path-Vector Contract Routing: Micro-level, on-demand, reactive • Provider initiates… • ISP C wants to advertise availability of a short-term contract link [C-B-A, 5-4-2-1, 20Mb/s, 30mins, $7.3+$3] [C-B, 5-4-2, 20Mb/s, 45mins, $6+$5] [C, 5-4, 30Mb/s, 45mins, $9] ISP B path announcement path announcement 2 ISP A 1 4 User X 3 ISP C path announcement 5 [C, 5-3, 10Mb/s, 30mins, $5] [C-A, 5-3-1, 5Mb/s, 15mins, $1.25+$1.2]

11. Path-Vector Contract Routing: Micro-level, on-demand, reactive • User initiates… • User X wants to know if it can reach 5 with 10-30Mb/s for 15-45mins in a $10 budget [5, 10-30Mb/s, 15-45mins, $10] [5, A, 1-2, 15-30Mb/s, 15-30mins, $8] [5, A-B, 1-2-4, 15-20Mb/s, 20-30mins, $4] ISP B path request path request 2 reply reply [A-B-C, 1-2-4-5, 20Mb/s, 30mins] 1 4 ISP A User X reply 3 ISP C path request Paths to 5 are found and ISP C sends replies to the user with two specific contract-path-vectors. Paths to 5 are found and ISP C sends replies to the user with two specific contract-path-vectors. 5 [5, A, 1-3, 5-10Mb/s, 15-20mins, $7] [A-C, 1-3-5, 10Mb/s, 15mins]

12. Deployment Issues How to motivate ISPs to participate? ISPs are very protective of their contracting terms – due to competition. But, BGP has similar risks too.. Observation of opportunity costs PVCR can be done at will.. Not much to loose if ISPs participate with their leftover bandwidth. Monitoring and verification of contracts Who is breaking the e2e performance? Active measurements can be OK for LSCR, but PVCR needs lightweight techniques. 12

13. Single-domain QoS Contract Pricing and Money-back • Pricing Advertisable Contracts: with focus on • Cost recovery • Traffic load • Promoting utilization • Pricing QoS Guarantees: applies financial engineering technique • Financial engineering techniques to price risk • Money-back Guarantees: for advertisable contract • Utilizing risk pooling concepts of insurance benefits

14. Temporal Extensions of Single-domain QoS Contracts • Bailout 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 bailout conditioned on network status Time

15. Spatial Composition for End-to-end QoS Contract Pricing • Several financial engineering optimizations along the way… • 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 Micro-level Service S D Macro-level Service

16. Summary Potential to offer end-to-end QoS services Contract Routing Link-state vs. Path-Vector Pricing the risk.. Risk management tools Spot contracts Forward contracts Options on Forward Flexibility to innovate services 16

17. THE END Thank you!