Internet users are able to reach any server from any access point at any time due to the interconnection and the exchange of IP traffic between about 40,000 different Autonomous Systems. The underlying business model for traffic exchange generates concerns among the network service providers (NSPs), resulting in deadlocks that are challenging the internet ecosystem. We introduce the Sending Party Network Pays (SPNP) model and demonstrate why this model can be considered to be a prerequisite to the deployment of QoS. We also outline ecosystem issues that can be addressed through this model and discuss its limitations.

1. The Evolution of Business Models in the Internet:
Sending Party Network Pays as the basis for quality of
service (QoS) support in the Internet.
SESERV Future Internet Workshop, Athens, January 31st, 2012.
Dr. Falk von Bornstaedt, Deutsche Telekom, International Carriers Sales and
Solutions (ICSS).
2.11.2011 1

2. Title.
Subtitle.
I pay 13€
for WLAN
in the
hotel
… and get
only
2MByte
in 40
minutes
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3. So I watch the
city panorama.
No QoS either -
only fog!
3

4. In air travel, we are
spending 1000s of €
to get better quality.
4

5. But we do not have a
similar option for the
Internet!
5

6. That‘s how we like it:
NO CONGESTION!
6

7. But the reality is often more
like this!
Solution? Add some lanes!
7

8. Well, are you sure
that many lanes will
indeed solve the
problem?
8
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9. Table of Contents
• A Story from the 19th Century
• Business Models in the IP Interconnection Market
• The Revenue Model
• Definition of the Sending Party Network Pays
Principle
• A first step towards End-to-End Quality of Service
• Why no QoS without the Sending Party Network Pays
Principle
Business Model Innovation / Sending Party Network Pays 9 b
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10. A Story from the 19th Century
 May 1st 1840 the “One
Penny Black” was
issued
 One of the first
Sending Party Pays
Principles in the world
was introduced
Source: Wikipedia
Business Model Innovation / Sending Party Network Pays 10 b
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11. Typical Traffic Exchange between two NSPs
Content Eyeball (End user)
A1 B1
Request of Content
B2
A2
NSP A NSP B
Delivery of Content
A3 B3
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12. Input/Output Business Model
Transformation
Input Process Output
External Resources Goods or Services
Company internal
Value Chain Universal
Connectivity
Connectivity
c o s t s id e o f t h e s ourc e s of
c ompa ny re ve nue
Source: Own creation, after Chesbrough, H. et al. (2002), p. 532; Pecha, R. (2004), p. 15; Wirtz, B.
W. (2000), p. 629.
Business Model Innovation / Sending Party Network Pays 12 b
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13. Value Proposition / Revenue Model Business Model
Business Model
Architecture
Value of Value Revenue
Proposition Creation Model
e.g. Universal e.g. Sending Party
Connectivity (with Network Pays
ensured SLA) Value Chain
Source: Own creation, after Stähler, P. (2001), pp. 41.
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14. Sending Party Network Pays Principle
 Adresses the question of who pays for the transport of traffic over an interconnection
– Should always be the sending side network when two NSPs are involved.
 The Revenue Model behind the previous described Business Model
 The Business Model of IP Interconnection on a Wholesale Level
S e n d in g P a r t y N e t w o r k P a y s P r in c ip le
Point(s) of Interconnection
A1 B1
IP Packets
NSP
A2 NSP A B2
B
Money
A3 B3
Source: Own creation, after Stähler, P. (2001), pp. 41.
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15. Sending Party Network Pays Principle
 Why no End-to-End QoS without SPNP?
 Only the sender is in the position to decide which IP packets need
premium quality (i.e. marking the IP Packet with the express tag)
 To inform the receiver that this packet needs special care
 The Idea of the SPNP is inspired by other industries, e.g. parcel or mail
services
 Receiving party would not be interested in paying for QoS IP Traffic
which then also has to be forwarded within their network
 The SPNP model does not address all the issues challenging the
internet but contributes to enhance the eco-system.
 The Model just applies to the wholesale IP Interconnection Business
 Does not address how the traffic receivers actually pay for the content
they receive.
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16. Sending Party Network Pays Principle
e n t S it u a t io n B e s t E f f o r t
Content-/ Application financed by the end
customer
Content-/
Application
Provider Best Effort
Flatrate
Content-/
Application
financed by the Eyebal
Advertising l ISP
Industry Best Effort
Transit
Best Effort
Transit
Provider Peering or Transit Interconnection
IP Transport with
Best Effort NSP Best Effort NSP
Client
Source: After Brenner, W. et al. (2008), p. 270; Zarnekow, R. et al.
(2008), p. 1064. Business Model Innovation / Sending Party Network Pays 16 b
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17. Sending Party Network Pays Principle
e F u t u r e w it h Q o S
Content-/ Application financed by the end
customer
Content-/
Application
Provider Best Effort
Flatrate
Content-/
Application
financed by the Eyebal
Advertising l ISP
Industry Best Effort
Transit
Best Effort
Transit
Provider Peering or Transit Interconnection
NSP Best Effort NSP
Client
Source: After Brenner, W. et al. (2008), p. 270; Zarnekow, R. et al.
(2008), p. 1064. Business Model Innovation / Sending Party Network Pays 17 b
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18. Sending Party Network Pays Principle
e F u t u r e w it h Q o S
Content-/ Application financed by the end
customer
Content-/
Application
Provider Best Effort
Flatrate
Content-/
Application Eyeba
financed by the ll ISP
Advertising
Industry QoS
Transit
QoS Best Effort
Transit Transit
Peering or Transit Interconnection
Provider
QoS Interconnection
IP Transport with QoS NSP NSP
Best Effort
Client
Source: After Brenner, W. et al. (2008), p. 270; Zarnekow, R. et al.
(2008), p. 1064. Business Model Innovation / Sending Party Network Pays 18 b
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19. Sending Party Network Pays Principle
Why no End-to-End QoS without SPNP?
Consider a Receiving-Party-Network-Pays-Model in the Internet for a Moment:
– Incentives to send many packets in high quality classes and to generate revenues
– These out payments of the ISP would be invoiced to the ISP’s customer
– The customer would refuse this, if he receives undesired IP packets (e.g. spam)
– RPNP would even enlarge fraud and spam problems
– RPNP would be more complex than SPNP from a business process, IT systems
and legal point of view
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20. The Sending Party Network Pays Principle
Sending Party Network Pays is
the Future
Jan 31st, 2012 20 b
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