Economic analysis of QoS differentiation in OPS networks

Abstract

Quality of Service (QoS) differentiation is the differentiated traffic-handling toachieve multiple service classes of varying quality. In addition to providing serviceguarantees necessary for delay-sensitive, real-time applications, service differentiation can provide increased income for network providers due to price differentiation opportunities. Moreover, with advances in technology, previous QoS schemes based on buffered networks cannot be used in newer, bufferless, optical networks.Current and future technologies were studied to facilitate economic analysis ofQoS differentiation in Optical Packet Switched networks. Empirical data fromrelated studies have been adopted to quantify a relationship between objectivemeasurements of network quality and a user s willingness to pay for that quality.Models that represent network scenarios with and without service differentiationwere discussed to address the viability of implementation. The model developedsuggests pricing for customer classes based on network parameters before and after implementation, cost of deployment, customer willingness to pay, and businessrequirements such as Return on Investment. It was determined that under certaincircumstances, a network provider may improve revenue via service differentiation.