Bailout forward contracts for edge-to-edge internet services

Despite the huge success of the Internet in providing basic communication services, its economic architecture needs to be upgraded so as to provide end-to-end guaranteed or more reliable services to its customers. Currently, a user or an enterprise that needs end-to-end bandwidth guarantees between two arbitrary points in the Internet for a short period of time has no way of expressing its needs. To allow these much needed basic services, we propose a single-domain edge-to-edge (g2g) dynamic capacity contracting mechanism, where a network customer can enter into a bandwidth contract on a g2g path at a future time, at a predetermined price. For practical and economic viability, such forward contracts must involve a bailout option to account for bandwidth becoming unavailable at service delivery time, and must be priced appropriately to enable Internet Service Providers (ISPs) manage risks in their contracting and investments. Our design allows ISPs to advertise point-to-point different prices for each of their g2g paths instead of the current point-to-anywhere prices, allowing discovery of better end-to-end paths, temporal flexibility and efficiency of bandwidth usage. We compute the risk-neutral prices for these g2g bailout forward contracts (BFCs), taking into account correlations between different contracts due to correlated demand patterns and overlapping paths. We apply this multiple g2g BFC framework on network models with Rocketfuel topologies. We evaluate our contracting mechanism in terms of key network performance metrics like fraction of bailouts, revenue earned by the provider, and adaptability to link failures. We also explore the tradeoffs between complexity of pricing and performance benefits of our BFC mechanism.