Paris Metro Pricing

1
Paris Metro Pricing

• Fredrik Wallenberg

2
Principles of PMP

• QoS needs time to stabilize
• QoS has to be predictable to remain stable

3
Liquidity vs. Stability

• Speculators add liquidity and will speed up the
  stabilization of the system

• Sporadic congestion combined with high liquidity
  could create serious ripple effects (more like
  self propagating instability).

• Purchase of blocks to increase inertia
• Damaged goods

4
Partition the Network

• Fixed Partition
• Routing Priorities
• Strict priority
• Weighted Round Robin
• Small number of partitions (to facilitate
  differentiation and minimize cost)

5
Implementation Issues

• Use 3-bit priority field available and unused in
  IPv4
• Will initially require a "wrapper" (that also
  allows network admins to manage policies)
• Changes in the router Technical tools would be
  those proposed in Diff-Serv QoS
• Accounting feature
• Interconnection with networks that dont
  implement PMP
• Revenue sharing between networks

6
The Good News

• Bandwidth does not seem to be in short supply,
  especially not on the backbone. Even if QoS is
  needed for the backbone, it should be implemented
  to the bare minimum.
• PMP is a light weight QoS implementation.

7
The Bad News

• Subdivision counters statistical multiplexing
• No QoS guarantee
• Implementation costs
• May not be sustainable under competition
• Demand for predictability
• Users dont like usage sensitive pricing

8
Users don't like usage sensitive pricing

• Consumers have shown they are willing to pay more
  for a flat-rate plan than they would under a
  per-use pricing scheme.
• Flat rates are cheaper to implement and maintain.
• There are plenty of example of Telecos and ISPs
  worldwide that successfully charge usage based
  pricing, but...

9
Aside on social preferences

• Seems like we prefer social methods of rationing
  (queues rather than auctions).
• Challenge is to design pricing schemes that
  approach the goal of efficiency that can be
  achieved by auctions mechanisms, and yet do
  respect consumer aversion to the auction.