Keynote talk: Internet charging

Price and quality differentiation are valuable tools that can provide higher revenues and increase utilization efficiency of a network, and thus in general increase social welfare. Such measures, most noticeable in airline pricing, are spreading to many services and products, especially high-tech ones. However, it is questionable whether they should or ever will be used widely in Internet transport. The main application of QoS techniques, if any, is likely to be in access links, either because resource constraints create an especially strong case for them (as may be true in some wireless connections), or for price discrimination purposes. However, in the photonic back-bones of the Internet it is best to provide uniformly high quality through low utilization. The main problem with most QoS techniques is that they require substantial in-volvement of the end users. When one considers the costs of the entire system, the seeming inefficiency of lightly utilized backbones pales next to the savings in engineering and operations of the rest of the information processing system (which includes far more than just the network). This argument is supported by historical evidence. The trend in a variety of communication services has been to pay more attention to user preferences and less to network efficiency as the service evolved. An additional factor that militates against QoS is that user utility is derived primarily from low transaction latency. That is what leads to low utilization, and makes most QoS techniques irrelevant.