A market-based framework for managing converged services

Abstract

Since ITU started to study the NGI (Next Generation Internet) architecture, the need to develop new Internet interconnection and access schemes has been growing. This study first introduces imperatives of an effective NUC (Network Usage Charging) framework for NGI services like VoIP and IP-TV. We start with analyzing the value chain structure in the NGI services, where NPs (Network Providers) and SPs (Service Providers; for e.g., VoIP providers) are key players. Special emphasis is given to identifying key economic factors for establishing a viable and efficient alternative of NUC so that it can create a promising marketplace for the NGI services. In particular, we identify and focus on the following components: (1) EB (Equivalent Bandwidth or Effective Bandwidth) for accurate estimation of network resource consumption, (2) T̅, industry benchmark of service-specific traffic load as a proxy for standard operating costs of an NP, (3) δ, contribution factor for inducing cooperation between NPs and SPs for effective end-to-end QoS. With these components as building blocks, developed is a new framework of NUC in order to properly address the NUC issues for NGI services. Our novel approach will encompass the ideas from the cost-based models as well as the revenue sharing models. The former pertains to the components (1) and (2), and the latter to the component (3) However, the proposed framework is more than a simple mix of the relevant ideas, and adequately combines key components in a well-organized and integrated form. The overall outline of the proposed framework is built upon the basis of a benefit sharing model, where the concept of the benefits is also closely connected with service-specific operating costs by means of WTP (Willingness-To-Pay) and EB. Specifically, we propose a simple equation as a novel NUC rule for NGI services. In the future research, we will analyze the potential impacts of the suggested NUC scheme on the social efficiency.