Service Negotiation and Contracting in Virtual Network Environment

The current Internet presents a high barrier to entry for new service providers, due to its inability to accommodate new protocols and technologies, and lack of competition among the network providers. Recently, network virtualization has gained considerable attention as a possible solution, as it enables multiple networks to concurrently run over a shared substrate. It allows for deploying diverse network protocols and technologies customized for specific networked services and applications. Moreover, any party can take on the role of a network provider by simply offering his virtual network infrastructure to customers, increasing competition in the market. However, the first challenge in realizing a fair and competitive market in a virtual network environment is to have a service negotiation and contracting mechanism in place, that will allow (i) multiple infrastructure providers to participate in a fair and faithful competition, and (ii) a service provider to negotiate the price and quality of service with the providers. In this thesis, we present V-Mart, an open market model and enabling framework for automated service negotiation and contracting in a virtual network environment. To the infrastructure providers, V-Mart fosters an open and fair competition realized by a two stage auction. The V-Mart auction model ensures that bidders (infrastructure providers) bid truthfully, have the flexibility to apply diverse pricing policies, and still gain profit from hosting customers’ virtual resources. To the service providers, V-Mart offers virtual network partitioning algorithms that allow them to divide their virtual networks among competing infrastructure providers while minimizing the total cost. V-Mart offers two types of algorithms to suit different market scenarios. The algorithms not only consider virtual resource hosting price but also the service provider’s preference for resource co-location and the high cost of inter-provider communication. Through extensive simulation experiments we show the efficiency and effectiveness of the algorithms under various market conditions

Congestion pricing and network expansion

Over the past decade network industries (such as gas, electricity, and telecommunications) have undergone a dramatic transformation. Competition has been introduced in industries that had long been viewed as textbook examples of natural monopolies. Production and transport have been unbundled to foster the introduction of competition: the capacity provider (the owner of the infrastructure) now often differs from the service provider. Chief among the challenges this raises for economists and policymakers: to design institutions that lead to"optimal"network expansion. Different arrangements have been suggested, ranging from indicative planning to decentralization of investment decisions through congestion pricing. Two questions lie at the core of the debate: Is the infrastructure network still a natural monopoly? And what role should congestion pricing play in ensuring optimal network expansion? The author shows that simple economic principles apply to the use of congestion pricing to induce network expansion: a) If network provision is competitive, congestion pricing leads to optimal investment. b) If network provision is monopolistic, congestion pricing leads to underinvestment. He shows the model applying to power networks as well as to the Internet. Policymakers must therefore assess whether network expansion is indeed competitive and design institutions that ease entry, or design an appropriate regulatory framework.Banks&Banking Reform,Economic Theory&Research,Common Carriers Industry,Transport and Trade Logistics,Markets and Market Access,Common Carriers Industry,Economic Theory&Research,Geographical Information Systems,Banks&Banking Reform,Transport and Trade Logistics

Trade, Growth and Increasing Returns to Infrastructure : The Role of the Sophisticated Monopolist

We model an economy with two final goods, manufactures produced under IRS and food. The scale economies in manufacturing are external (therefore compatible with perfect competition) and traceable to internal economies in the provision of an infrastructural service (the third sector of the economy). We examine the equilibria of this economy under both autarky and free trade. We thus revisit a theme with a voluminous literature, beginning with R. C. O. Matthews(1950) vintage classic and including, among others, Panagariya (1991), Krugman (1991), and Venables (1996). Much of this as well as our own work concerns multiple equilibria : it overlaps the development literature on poverty traps from Rosenstein Rodan (1943) to Murphy, Schleifer and Vishny (1989). We differ from this body of work in a major, and some minor, respects. We trace the source of increasing returns to infrastructure, and our focus is on the role of the infrastructure providers beliefs in determining the equilibrium and the fate of the economy. Internal economies in infrastructure provision ensure that it is non-competitive . We consider a pure monopoly. The infrastructure provider is of course aware of the impact of his decisions on the price of his services, but he may or may not appreciate their impact, on demand for labor (in a market where he competes with all other industrial and agricultural producers) and wages and induced effects on demand for infrastructure itself. He may in short be a nave or a sophisticated decision-maker. We model the nave infrastructure provider after Venables (1996). Venables portrays a producer of intermediates who derives the demand curve for his product on the assumption that his customers have already contracted for their purchases of other inputs, specifically labor. Similar beliefs on the part of our infrastructure provider generate an equilibrium that is unique in the closed economy. In the small open economy, on the other hand, equilibria, where they exist , will generally be multiple : at any world price, there will generally exist one at a low level with unexhausted scale economies and another at a high level where these have been exhausted.Increasing returns to scale, cognitive hierarchy, multiple equilibria, uniqueness, Cournot oligopoly

An analysis of mobile internet service in Thailand: Implications for bridging digital divide

Mobile Internet is growing around the world without exception for developing countries like Thailand by passing the poor legacy wired infrastructure. This study attempts to provide guidance to a national regulatory agency (NRA) by addressing the following question: What are the key determining factors to explain the probability that individual consumer will use mobile Internet? The discrete choice model is employed to empirically examine whether the service and application attributes, socio-economic variables and service provider has systematic link with the decision of consumer. The data from a national survey in 2010 commissioned by the National Telecommunications Commission (NTC) of Thailand is used for the analysis. Based on the findings, fixed telephony, e-mail, age, area of living and mobile operator are recognized as the strongest determinants for mobile Internet adoption. The findings suggest that the mobile Internet becomes an alternative technology to bridge the digital divide since a group of people who have no fixed Internet connection at home they can connect the Internet via mobile Internet. As such, telecom regulator and policy makers need to consider the policies regarding to infrastructure investment frequency allocation, content and application development and competition in order to stimulate the growth of mobile Internet adoption and close the digital divide within country. --Mobile Internet,digital divide,developing country

The End of Net Neutrality

In 2005, the FCC changed the competitive landscape of the high-speed Internet access industry by classifying both DSL and cable modem service as information services. While many hail this move as a victory for competition and free markets, others fear the ruling could jeopardize the future of the Internet. This iBrief examines the potential end of net neutrality and concludes that new federal regulations are unnecessary because antitrust laws and a competitive marketplace will provide consumers with sufficient protection

Adam Smith goes mobile : managing services beyond 3G with the digital marketplace

The next generation of mobile communications systems is expected to offer new business opportunities to existing and new market players. A market-based middleware framework has been recently proposed whereby service providers, independent of network operators, are able to tender online service contracts to network operators in a dynamic and competitive manner. This facilitates a seamless service provision over disparate networks in a consumer-centric manner. Service providers select network bearers according to the network operators' ability to meet the QoS target, which in turn is influenced, among other things, by user's price and quality requirements. The benefits of this proposal are the complementarity of numerous network resources, the decoupling of services and networks in a self-organising distributed environment, and increased competition to consumers’ advantag

Settling for efficiency : a framework for the European securities transactions industry

Despite a lot of re-structuring and many innovations in recent years, the securities transaction industry in the European Union is still a highly inefficient and inconsistently configured system for cross-border transactions. This paper analyzes the functions performed, the institutions involved and the parameters concerned that shape market and ownership structure in the industry. Of particular interest are microeconomic incentives of the main players that can be in contradiction to social welfare. We develop a framework and analyze three consistent systems for the securities transaction industry in the EU that offer superior efficiency than the current, inefficient arrangement. Some policy advice is given to select the 'best' system for the Single European Financial Market