The bandwidth exchange architecture

New applications for the Internet such as video on demand, grid computing etc. depend on the availability of high bandwidth connections with acceptable quality of service (QoS). There appears to be, therefore, a requirement for a market where bandwidth-related transactions can take place. For this market to be effective, it must be efficient for both the provider (seller) and the user (buyer) of the bandwidth. This implies that: (a) the buyer must have a wide choice of providers that operate in a competitive environment, (b) the seller must be assured that a QoS transaction will be paid by the customer, and (c) the QoS transaction establishment must have low overheads so that it may be used by individual customers without a significant burden to the provider. In order to satisfy these requirements, we propose a framework that allows customers to purchase bandwidth using an open market where providers advertise links and capacities and customers bid for these services. The model is close to that of a commodities market that offers both advance bookings (futures) and a spot market. We explore the mechanisms that can support such a model.