DCN Cost Recovery Models

Chris Robb Operations Manager, Internet2

DCN Pilot Staff Co-Lead

2 February 2009

DCN Overview

•  New Internet2 service transitioning from R&D to production in mid 2009

•  Internet2 is involved in gathering community input on the parameters of the service

•  This talk is specifically focused on the billing model for Internet2 DCN

Goal: Keep it Simple •  The DCN pilot service must be simple to

deploy and operate from the perspective of connectors, network members, campuses, and researchers.

•  Internet2’s implementation of the DCN pilot service should be lightweight and not require development of an extensive set of tools or processes that would invest a significant financial commitment in the development of the pilot service.

Background

Pilot Implementation Phases (1) •  Phase 1: Internet2 Project Managers engage in

dialogue with the AOAC and its constructs to obtain a mandate to move forward with the planning and implementation process. –  This has been completed.

•  Phase 2: Internet2 staff engages the community in discussions that will assist in the formation of a project plan. Internet2 makes usage statistics available for members. At the conclusion, Internet2 Project Managers will have a DCN Pilot Service proposal formulated for review. –  This phase is largely complete.

Pilot Implementation Phases (2) •  Phase 3: The DCN WG reviews the DCN Pilot

Service proposal and provides feedback to the Project Managers. At the conclusion, Internet2 will have a project plan constructed for the NTAC and AOAC to review. –  This is expected to happen in early 2009

•  Phase 4: Internet2 staff begins implementation of the AOAC-approved project plan in close concert with the DCN WG. At the conclusion, the DCN Pilot Service will be available. –  This phase is expected to conclude in June 2009

Model Analysis Process

Model Analysis Process How did we get here? •  Based on community discussions, define the DCN

Landscape of potential domestic adopters, partners and peers

•  Take community and staff feedback to define a list of evaluation criteria

•  Write up all business models that have been discussed in brainstorming sessions

•  Remove models that were blatantly complex or too radical a departure from existing network paradigms

•  Rate remaining models against each criteria on a scale of 1 to 3.

•  Choose top three models and elaborate further on the pros and cons

Evaluation Criteria •  Simple User Operation •  Lightweight for Internet2 •  Encouragement of DCN Usage •  Encouragement of Hybrid Networking •  Recuperation of costs •  Protection of Resources •  Predictable Expense •  Fairness to Users •  Scalable •  Mapping to the Landscape •  Doesnʼt Distort Usage Patterns

Immediately Discounted Fee Models

•  Pure Gigabit Miles billing •  Line of Credit Model •  Route Scarcity Model •  Reservation Scarcity Model •  Game Theory •  Network Shares •  Predictive Usage

Investigated and Discounted Fee Models

•  Unlimited-Restricted Model •  Unlimited- Tiered Model •  Pure Gigabit Hours Model •  Auction Based Model

– This was actually too radical from the start, but we used it as calibration for the other models

Flat Fee with Unrestricted Usage •  Flat fee for DCN usage equal to IP

connection •  No fiduciary constraints to circuit creation •  Unlimited capability to create circuits on

network •  Understanding that there will be

community review checkpoints to discuss introduction of circuit creation constraints

Flat Fee with Unrestricted Usage •  Pros

–  This is a simple budgeting concept for the community and maps well to existing billing practices. It provides a predictable cost to the Connectors who are wary of the level of adoption.

–  This is extremely lightweight from Internet2ʼs perspective. There is little to be done other than operate the DCN software and infrastructure and provide an additional NRC to our Connectors at the time of renewal

–  This provides no barriers to usage of the network and encourages DCN adoption without the concern of needing to fund additional time.

•  Cons –  This doesnʼt provide anything in the way of protection from

monopolization aside from peer review. –  It diverges from the AOAC approved concept of billing on a

usage-based metric –  Given the low barrier for circuit creation, it doesnʼt scale well to

many 10G Connectors.

Usage Based – Initial Bundle with Optional Buy•  Mirrors “Bruges Model” that was shopped

around to the connectors and AOAC in mid ʻ08

•  Connectors would purchase initial bundle of gigabit hours on DCN

•  Additional bundles of hours can be purchased in several different sizes

•  The more hours purchased, the cheaper the hours

•  Additional tiers of usage would be purchased in arrears to avoid impact to existing budget cycles

Usage-Based Initial Bundle with Optional Buy

•  Pros –  This model is fairly lightweight for Internet2 in terms of billing and usage tracking. –  It encourages usage of DCN with an initial bundle of hours. –  Depending on the usage patterns, this model provides good scalability as more

demand on the network provides more revenue with which to fund future network growth.

–  This provides a good fiduciary incentive against monopolization of the network infrastructure.

–  Billing for historical annual usage lessens the variability to the existing annual budget cycle.

–  This model follows the already-approved mandate from the AOAC. •  Cons

–  The model still carries some form of unpredictability for future budget cycles. –  There is burden on the Connectors to manage their users in a way that they judge to

be equitable where no such definition of equitability exists. –  Some Connectors have indicated that the lack of an unlimited usage model will be

problematic for large researchers. –  Itʼs unclear whether the community will be able to recoup their costs from the network

unaware researchers.

Hybrid: Flat Fee – Restricted Usage

•  Similar to the flat fee unlimited model, though it provides varying levels of aggregate bandwidth that a network can request at any given time (e.g. 1Gbps)

•  DCN Connector is given a small number of bundled tokens that they can exchange to allow for higher bandwidth circuits

Hybrid: Flat Fee – Restricted Usage •  Pros

–  This is a simple budgeting concept for the community and maps well to existing billing practices. It provides a predictable cost to the Connectors who are wary of the level of adoption.

–  This is more overhead for Internet2 in terms of tracking and enforcing the appropriate constraints, but is fairly simple in terms of billing systems and operations.

–  This provides no barriers to adoption within a given constraint system. It does provide user-defined boundaries that can be customizable as the Connector sees fit.

–  This provides a fiduciary level of incentive against monopolization of resources. •  Cons

–  For networks that contract for full 10G, reservable, unlimited duration circuits, it provides little in the way of protection from monopolization other than peer review.

–  It puts burden on the Connector to make a decision about their user base and demand levels for a service that is currently lacking in real-world statistics.

–  Depending on the level of uptake on the service levels, it may not scale well to a large number of connectors.

–  It diverges from the Bruges concept of billing on a usage-based metric.

DCN Working Group Feedback •  Predictability of the flat fee model was

very attractive from a budgeting standpoint

•  Recognition that Internet2 will need to recover some costs to provide growth potential

•  Usage patterns are unclear (no LHC data yet)

Preliminary Thoughts •  First *draft* of Internet2 DCN Strawman

will likely suggest a flat-fee unrestricted model

•  There will be regularly spaced community checkpoints to evaluate potential monopolization scenarios and appropriate responses

•  Did I mention this is a DRAFT? Come to the DCN Working Group on Wednesday to discuss