A Two Market Inter-ISP Contracting Framework: Bandwidth Allotment Problem

Abstract

An automated way of establishing inter-ISP contracts will enable ISPs to flexiblyallocate their network resources to different contracts. However, this flexibility comeswith the additional complexity in managing the ISP network. Several interestingquestions arise:1) How will an ISP decide when and where (from which ingress to which egress) toadvertise a new contract?2) How will an ISP assess the risk of a particular edge-to-edge path and reflect thatrisk on the contracting parameters?3) How will an ISP fraction its links' bandwidth to different contracts?In this work, we focus on a simplified version of the last question above, where only twocategories of contracts are considered: How does an ISP fraction its links' bandwidthamong long-term and short-term contracts? This question is particularly relevant whenthere are two available markets for contracting based on how the end-to-end contracts areestablished: link-state contract routing (LSCR) vs. path-vector contract routing (PVCR).Thus, the amount of resources to be allocated towards long-term contracts and short-termcontracts by an ISP is found. For this, two cases are considered. In the first case thedemand remains stable and in the second case the demand varies comparatively. In thesecases, the ratio of resource allocation to the long-term and the short-term contracts isoptimized. The maximum total revenue, long-term revenue, short-term revenue andoptimal bandwidth reservation levels are found for variations of short-term demand andshort-term contract revenue per unit time and demand are found.