A comparative study of usage-based charging schemes

Charging and accounting in modern high-speed networks are extremely vital for their successful operation and growth. Tariffs and pricing schemes are needed for the network to recover its costs in a fair way from the diverse population of users, and to effectively allocate network resources. Economic theory, suggests that usage-based charging (or some scheme closely related to usage) will be employed by a service provider in the case of perfect competition. This is the type of charging for network services we consider in this work. Ideally, accurate usage-based charging can be done on the basis of the effective bandwidth of each separate source, which can be estimated either analytically or through simulation and on-line estimation. Since such an estimation can be rather complicated, in this work, we investigate two simpler charging formulae which are based on bounds for the effective bandwidth. One of the formulae is based on a simple bound, while the other is based on a tighter one. We compare the charges derived through these formulae, as well as these charges to that based on the accurate calculation of the effective bandwidth of the source during the call. Three types of traffic sources are considered: on/off Markov modulated fluids; 3-state Markov modulated fluids; and MPEG traffic obtained through traces and models. We thus assess appropriateness of the various formulae for charging each of the considered traffic sources