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Describes the fundamental economic properties of broadband networks
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The LadderHow money is connected to multiplexing
Dr Neil DaviesPredictable Network Solutions Ltd
Peter ThompsonPredictable Network Solutions Ltd
Martin GeddesMartin Geddes Consulting Ltd
PREDICTABLENETWORK
SOLUTIONS
© 2013 All Rights Reserved
Dr Neil DaviesCo-founder, Predictable Network Solutions Ltd
Peter ThompsonCTO, Predictable Network Solutions Ltd
Martin GeddesFounder, Martin Geddes Consulting Ltd
PREDICTABLENETWORK
SOLUTIONS
The only ex ante network performance engineering company in the world.
Consultancy on the future of telecoms and the Internet.
PREDICTABLENETWORK
SOLUTIONS
PREDICTABLENETWORK
SOLUTIONS
Sustainable Broadband Economics WorkshopLondon, 22nd May 2013
Fundamentals of Network Performance WorkshopLondon, 24th May 2013
www.sustainablebroadband.com
Setup
The Ladder
The Rungs
The Multi-plexing
The Money
The Trouble
The Solution
PREDICTABLENETWORK
SOLUTIONS
{ {Substance
Overview
The Ladder
The Rungs
The Multi-plexing
The Money
The Trouble
The Solution
PREDICTABLENETWORK
SOLUTIONS
REVENUE
How are network
operator costs and revenues connected?
COSTS
?
COSTS
REVENUE
The “Ladder” provides the causal links
COSTS
REVENUE
REQUIRES
ENABLES
It is a chain of reasoning
Each ‘rung’ enables the one above…
…and requires the one below
ENABLES REQUIRES
COSTS
REVENUE
REQUIRES
ENABLES
Hard constraints:
no escape!
COSTS
REVENUE
REQUIRES
ENABLES
It helps us to answer the question:
How can the network operator maximise profits?
-
+
COSTS
REVENUE
REQUIRES
ENABLES
Why care?
Failure to understand and
exploit these simple causal relationships
creates enormous
wasteand
missed revenue opportunities
Overview
The Ladder
The Rungs
The Multi-plexing
The Money
The Trouble
The Solution
PREDICTABLENETWORK
SOLUTIONS
REVENUE
What causes users to pay
network operators?
REVENUE
Network users can have good
experiences
or
bad experiences
FIT-FOR-PURPOSE EXPERIENCE
REVENUE
Revenue is a result of
deliveringfit-for-purpose
experiences
FIT-FOR-PURPOSE EXPERIENCE
REVENUE
What is a‘fit-for-purpose’
experience?
FIT-FOR-PURPOSE EXPERIENCE
REVENUE
Good experiences
sufficiently common
+Bad experiences
sufficiently rare
FIT-FOR-PURPOSE EXPERIENCE
REVENUE
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
View aweb page,
watch a video, download an
e-book:
Those experiences are
outcomes of computation.
REVENUE
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
Outcomes
Examples of good outcomes:
watch a movie,talk to your granny
Examples of bad outcomes:
‘circle of death’,poor voice quality
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
Flows
Computational outputs require
data inputs!
A network delivers individual and
aggregate flows of packets to enable this computation
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
Flows
Good outcomes: Require flows with
bounded packetloss and delay
Bad outcomes: Experience flows
with excessive packet loss or delay
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
Demand
+
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
Demand
• Highly heterogeneous
• Has strong internal couplings
COSTS
Where do network
operator costs come from?
COSTS
TIN
Tin
Any physical substrate
Spectrum, fibre, copper, ducts, street cabinets, cell towers,
and the (unpowered)
transmission and routing equipment
COSTS
MECHANISMS
TIN
Mechanisms
Active data links, operating queues in
routers, radio network controllers
COSTS
MECHANISMS
TRANSMISSION
TIN
Transmission
The complete system for moving data from A to B
Transmission iswhat the network
doesrather than what it is
COSTS
MECHANISMS
TRANSMISSION
TIN
Supply
-
COSTS
MECHANISMS
TRANSMISSION
TIN
Microseconds
Minutes
Months
Timescales
We can create and reallocate supply at different timescales
COSTS
MECHANISMS
TRANSMISSION
TIN
Supply
Scales together: extra resources at
one level need more of everything below
COSTS
REVENUE
MULTIPLEXING
Multiplexing
How are costs and revenues
connected?
COSTS
REVENUE
MULTIPLEXING
Multiplexing
This is where supply and demand meet
COSTS
REVENUE
FIT-FOR-PURPOSEEXPERIENCE
MULTIPLEXING
TIN
Shares the fixed andfinite resources
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MECHANISMS
TRANSMISSION
REQUIRES
ENABLES
TIN
MULTIPLEXING
The Ladder
COM
PUTA
TIO
NTR
ANSL
OCA
TIO
N
Overview
The Ladder
The Rungs
The Multi-plexing
The Money
The Trouble
The Solution
PREDICTABLENETWORK
SOLUTIONS
What is multiplexing?
Over-simplification ahead(many important statistical issues omitted)
Simplest case
A
B
C
D
Visualising multiplexing
Input data flows
Before
A
B
C
D
Visualising multiplexing
Input data flows TransmitMux
Before
A
B
C
D
Visualising multiplexing
A
B
C
D
Input data flows TransmitMux Demux Output data flows
Before After
A
B
C
D
Packets get lost
A
B
C
D
Before After
LOSS
A
B
C
D
Packets get delayed
A
B
C
D
Before After
DELAY
A
B
C
D
Quality of Experience (QoE) failures
A
B
C
D
Before After
QoE FAILURE
Bad experiences are caused by excessive loss and delay
A
B
C
D
Visualising multiplexing
A
B
C
D
Before After
DEMAND SUPPLY SUPPLYDEMAND
A
B
C
D
We have (scheduling) choices!
A
B
C
D
Before After
What to lose? What to delay (and by how much)?How to avoid QoE failures?
COSTS
REVENUE
FLOWS
TRANSMISSION
MULTIPLEXING
Matches instantaneous demand to supply
+-
COSTS
REVENUE
FLOWS
TRANSMISSION
MULTIPLEXING
Schedules packets (from flows) for transmission
COSTS
REVENUE
CONSUMER
PRODUCER
TRADEROption trading space
(Advanced class only! More information in
our workshops…)
+
-
Danger! Advanced mathematics ahead!
COSTS
REVENUE
MULTIPLEXING
A statistical process – like a game of chance
How does this game of chance
work?
It’s a tussle
Networkusers
Networkoperators
Bad coincidences
cause experiences
More network use and users
make bad coincidences more likely
Resource efficiencyLOW HIGH
MULTIPLEXING
Capacity demandLOW HIGH
MULTIPLEXING
Feasible Infeasible
MAX CAPACITY
Risk of bad coincidencesLOW HIGH
MULTIPLEXING
Increases with load
Flow
effi
cien
cy
LOW
HIGH
MULTIPLEXING
Flow
effi
cien
cy
LOW
HIGH
MULTIPLEXING
Sche
dula
bilit
y de
man
d
LOW
HIGH
Feasible
Infeasible
MAX SCHEDULABILITY
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGH
MULTIPLEXING
Strong flow isolation= Happy users
High stat mux gain= Happy operator
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGH ??HELL
HEAVEN
MULTIPLEXING
HOW?
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGH
Feels to users like the network is empty,
even when it is full!
MULTIPLEXING
HEAVEN
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGH
Requires lots and lotsof good coincidences
& very few badcoincidences
MULTIPLEXING
HEAVEN
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGH
MULTIPLEXING
HEAVEN
HOW?
By tipping the odds through effective
scheduling
COSTS
REVENUE
MULTIPLEXING
Success
Depends on how well you do this scheduling
• Affects user fitness-for-purpose and QoE hazards…
• …as well as tin required and cost hazards…
• …and thus profit and risk
COSTS
REVENUE
MULTIPLEXING
Failure
Poor flow isolation (too many badcoincidences)
Poor resource usage (too much
over-provisioningor unused capacity)
£
COSTS
REVENUE
MULTIPLEXING
Predictability
Can only play the game of chance if
you know the odds.
If you don’t know the odds, or they keep changing as
you play,then you lose!
Overview
The Ladder
The Rungs
The Multi-plexing
The Money
The Trouble
The Solution
PREDICTABLENETWORK
SOLUTIONS
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING Revenue
£
ANY NETWORK SERVICEVALUE IN USE The customer
doesn’t care about operator revenue
They seek
value-in-use
ANY NETWORK SERVICEVALUE IN USE
FIT-FOR-PURPOSE EXPERIENCE
Effective Task Substitution
Value-in-use comes from substituting for
another task that has higher costs
and/or lower benefits.
Fitness-for-purpose is when this
substitution occurs.
COSTS
ANY NETWORK SERVICEVALUE IN USECU
STO
MER
DO
MAI
N
SERVICE OPERATO
R DO
MAIN
Two perspectives
• Customer• Service operator
ANY NETWORK SERVICEVALUE IN USECU
STO
MER
DO
MAI
N
SERVICE OPERATO
R DO
MAIN
Two perspectives
They don’t concern themselves about the same things
ANY NETWORK SERVICEVALUE IN USECU
STO
MER
DO
MAI
N
SERVICE OPERATO
R DO
MAIN
FLOWS
BENEFIT
KEY
PAYMENT
Benefits
• Payment is typically for data flows across the network
• This is at a different logical level to what the customer values
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING Costs
£
COSTS
ANY NETWORK SERVICEVALUE IN USE
PAYMENT
CUST
OM
ER D
OM
AIN
SERVICE OPERATO
R DO
MAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
COST
KEY
PAYMENT
User costs
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USECU
STO
MER
DO
MAI
N
SERVICE OPERATO
R DO
MAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TINKEY
PAYMENT
Capex
Scales according to how much tin is
required
Halving the scheduling efficiency doubles your capex!
COST
PAYMENT
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR EVERY
ACTIVITY
PAYMENT
CUST
OM
ER D
OM
AIN
SERVICE OPERATO
R DO
MAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
COST
KEY
PAYMENT
Opex
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING Risks
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR EVERY
ACTIVITY
PAYMENT
CUST
OM
ER D
OM
AIN
SERVICE OPERATO
R DO
MAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
PAYMENT
Hazards
Things can(and do)go wrong
BENEFIT
COST
KEY
HAZARD
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR EVERY
ACTIVITY
PLAN B
FAILURE
PAYMENT
CUST
OM
ER D
OM
AIN
SERVICE OPERATO
R DO
MAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
PAYMENT
BENEFIT
COST
KEY
HAZARD
Hazards
The Customer experiences QoE failures & must insure against
excess risk
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR EVERY
ACTIVITY
PLAN B
FAILURE
PAYMENT
CUST
OM
ER D
OM
AIN
SERVICE OPERATO
R DO
MAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
PAYMENT
Hazards
The network operator has SLAs &
may require unplanned capacity
upgrades
CAPACITYBENEFIT
COST
KEY
HAZARD
REFUND
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR EVERY
ACTIVITY
PLAN B
FAILURE
PAYMENT
CUST
OM
ER D
OM
AIN
SERVICE OPERATO
R DO
MAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
PAYMENT
Hazards
The size of the hazards are all
directly related to how well we do the
multiplexing
Our experience is that these hazards
are poorly modelled in broadband
networks (if at all)
CAPACITYBENEFIT
COST
KEY
HAZARD
REFUND
Overview
The Ladder
The Rungs
The Multi-plexing
The Money
The Trouble
The Solution
PREDICTABLENETWORK
SOLUTIONS
COSTS
REVENUE
?How well are
network operators
playing the game of chance?
CAPEX FOR EVERY ASSET
TELEPHONY SERVICEVALUE IN USE
OPEX FOR EVERY
ACTIVITY
TRAVEL TO LONDON
FAILED CALL
CALL CHARGE
CUST
OM
ER D
OM
AIN
NETW
ORK O
PERATOR D
OM
AIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
CALL CHARGE
BENEFIT
COST
KEY
HAZARD
REFUND
Fixed Telephony
Costs and revenues in balance
Hazards well contained and
managed
Life used to be simple and good…
But then we changed…
Time-division multiplexed
circuits
Packet-based statistical
multiplexing
Complete phaseand flow isolation
Weak phaseand flow isolation
TELEPHONY BROADBAND
Game of chance
was easy
Game of chance is
hard
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGH TDM(core)
MULTIPLEXING
TDM(edge)
TDM for voice had highly-utilised network cores, and
low peak-to-mean at the network edge
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGH
MULTIPLEXING
TDM
For bursty data, TDM is highly
inefficient, even if it is very effective
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGHIP
(core)
MULTIPLEXING
IP is both efficient and effective in the core for
many kinds of data
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGH
IP(access network)
MULTIPLEXING
However, IP is much weaker at
the network edge.Why is this?
Resource efficiency
Flow
effi
cien
cy
LOW HIGH
LOW
HIGH
IP(access network)
MULTIPLEXING
HEAVEN
Resource efficiency
Flow
effi
cien
cy
LOW MEDIUM
LOW
HIGH
MULTIPLEXING
HIGH
IP(access network)
HEAVENHEAVENHeaven gets further away
Resource efficiency
Flow
effi
cien
cy
LOW MEDIUM
LOW
HIGH
MULTIPLEXING
HIGH
IP(access network)
Ineffective scheduling forces reliance on over-provisioning
(to try to make bad coincidences rare)
- which has diminishing returns
HEAVENHEAVEN
Resource efficiency
Flow
effi
cien
cy
LOW MEDIUM
LOW
HIGH
MULTIPLEXING
HIGH
Current approaches are infeasible to schedule at
high load
IP(access network)
Resource efficiency
Flow
effi
cien
cy
LOW MEDIUM
LOW
HIGH
MULTIPLEXING
HIGH
IP(access network) Network collapses
We want to know!
Are network operators
delivering fitness-for-purpose and good outcomes
?
We want to know!
No !
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USECU
STO
MER
DO
MAI
N
NETW
ORK O
PERATOR D
OM
AIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE EXPERIENCE ?
Have lost visibility and control over
outcomes
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USECU
STO
MER
DO
MAI
N
NETW
ORK O
PERATOR D
OM
AIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE EXPERIENCE
The broadband industry is delivering
purpose-for-fitness,
notfitness-for-
purpose
?
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USECU
STO
MER
DO
MAI
N
NETW
ORK O
PERATOR D
OM
AIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE EXPERIENCE Schedulability
has been largely
abandoned (although the
issues are omnipresent)
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USECU
STO
MER
DO
MAI
N
NETW
ORK O
PERATOR D
OM
AIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE EXPERIENCE At best we
compete on transmission
speed, which is only a weak
proxy for outcomes
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USECU
STO
MER
DO
MAI
N
NETW
ORK O
PERATOR D
OM
AIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE EXPERIENCE Marketing
focus on mechanisms
and tin(4G! Fibre!
3GPP rel 22!?!)
We want to know!
Are user QoE hazards being
sufficiently managed and
mitigated?
We want to know!
No !
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USE
MAKE A PHONE
CALL
FAILED VIDEO LINK
CUST
OM
ER D
OM
AIN
NETW
ORK O
PERATOR D
OM
AIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE EXPERIENCE
Lack of service assurance
means users cannot depend on broadband
services: creates hidden
costs
We want to know!
Is tin being used efficiently and effectively to deliver flows ?
We want to know!
No !
LOTS OF UNNECESSARY CAPEX
INTERNET SERVICE PROVIDERVALUE IN USECU
STO
MER
DO
MAI
N
NETW
ORK O
PERATOR D
OM
AIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE EXPERIENCE Using tin to
solve what are rightly
scheduling problems
Huge misallocation
of capital
We want to know!
Are operators appropriately managing and mitigating their
cost hazards?
We want to know!
No !
UNPLANNED CAPEX SPENDING
INTERNET SERVICE PROVIDERVALUE IN USECU
STO
MER
DO
MAI
N
NETW
ORK O
PERATOR D
OM
AIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE EXPERIENCE
CAPACITY
Have taken on new contingent
liabilities
Uncosted, and not seen in
balance sheet
Overview
The Ladder
The Rungs
The Multi-plexing
The Money
The Trouble
The Solution
PREDICTABLENETWORK
SOLUTIONS
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING
ServiceAssurance
How can we restore link to outcomes and fitness-for-
purpose?
Then more can be charged for reducing
user QoE hazards
COM
PUTA
TIO
NTR
ANSL
OCA
TIO
N
COM
PUTA
TIO
NTR
ANSL
OCA
TIO
N
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING
Quality Transport
Agreements
• How can we formally describe the requirements of demand and capabilities of supply?
• How can we create digital supply chains?
COM
PUTA
TIO
NTR
ANSL
OCA
TIO
N
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
Polyservice networks
How can we match diversity of demand with an appropriate diversity of supply?
DEMAND SUPPLY
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING
Advanced Trading Spaces
How can we match supply and demand
at all timescales?
Microseconds
Minutes
Months
Sustainable BroadbandEconomics Workshop
London, 22nd May 2013
Fundamentals of Network Performance Workshop
London, 24th May 2013
www.sustainablebroadband.com
PREDICTABLENETWORK
SOLUTIONS
Neil [email protected]
Peter [email protected]
Martin [email protected]
PREDICTABLENETWORK
SOLUTIONS
