A New Bilateral Arrangement between Interconnected Providers

Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 5539)


Cost allocation between interconnected networks is based on measured traffic flows. This principle, however, does not provide a fair way for sharing costs. In this paper, a new bilateral model, called Differentiated Traffic-based Interconnection Agreement (DTIA) for intercarrier compensation is presented. In particular, the approach aims to determine the original initiator of a transmission by means of traffic differentiation into two types and to compensate the interconnection costs. Unlike the existing financial settlements, under which the payments are made based on the traffic flows, the proposed method suggests costs compensation according to the differentiated traffic flows. Further, in order to support the described payment scheme, a simple and scalable traffic management mechanism was designed. The results obtained from the comparative analysis showed that determination of a transmission initiator induces cost sharing between all parties and therefore, reduces the interconnection payments between providers.


Interconnection arrangement intercarrier compensation Internet economics 


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Copyright information

© Springer-Verlag Berlin Heidelberg 2009

Authors and Affiliations

  1. 1.Department of Mathematics and Computer ScienceUniversity of MannheimMannheimGermany
  2. 2.TEMEP, School of Industrial and Management Engineering, College of EngineeringSeoul National UniversitySouth Korea

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