Congestion control, differentiated services, and efficient capacity management through a novel pricing strategy

Pricing is an effective tool to control congestion and achieve Quality of Service (QoS) provisioning for multiple differentiated levels of service. In this paper, we propose a practical, flexible and computationally simple pricing strategy that can achieve QoS provisioning in Differentiated Services networks with multiple priority classes operating in an efficient economic market, while also maintaining stable transmission rates from end-users. In contrast to previous work, in which dynamic pricing strategies are based on the state of congestion alone, our strategy adds a separate price component for the preferential service received by a packet. This permits an efficient market for network resources and services, with the price charged being dependent upon both the cost of the resources and the dynamically changing demand for it. In addition, this automatically enforces efficient capacity management in the allocation of resources among the various service classes, leading to a user-centric approach where a user is not charged a higher price unless preferential service is actually delivered. Our analytical and simulation results demonstrate that, with the combination of user adaptation and our pricing strategy, differentiated services can be achieved with stable transmission rates. This paper concludes with a discussion of various operational issues associated with actual deployment of such a pricing strategy. q 2003 Elsevier Science B.V. All rights reserved.