The direction of value flow in connectionless networks

Abstract

This paper argues that all network providers in a connectionless multi-service network should offer each class of their service to each neighbour for each direction at a single price. This is called “split-edge pricing”. If sets of customers wish to reapportion their networking charges between themselves, this should be tackled end-to-end. Edge reapportionment should not be muddled with networking charges, as is the case in the telephony market. Avoiding the telephony approach is shown to offer full reapportionment flexibility, but avoids the otherwise inevitable network complexity, particularly for multicast. “Split-edge pricing” is recursive, applying as much to relationships between providers as to edge-customers. Various scenarios are discussed, showing the advantage of the approach. These include phone to Internet gateways and even inter-domain multicast conferences with heterogeneous QoS. The business model analysis suggests a new, purely financial role of end-to-end intermediary in the Internet industry.