Prof. of Intl. Conf. on Networking 2001

		  Optimal Provisioning and Pricing of Internet
		Differentiated Services in Hierarchical Markets

		      Errin W. Fulp and Douglas S. Reeves

Abstract. 
Network service providers contract with network owners for
connection rights, then other individual users network access at a price.
Within this hierarchy, the service provider must carefully provision and
allocate (price) network resources (e.g. bandwidth). However, determining
the appropriate amount to provision and allocate is problematic due
to the unpredictable nature of users and market interactions. This paper
introduces methods for optimally provisioning and pricing differentiated
services. These methods maximizes profit, while maintaining a low blocking
probability for each service class. The analytical results are validated
using simulation under variable conditions. Furthermore, experimental
results will demonstrate that higher profits can be obtained through
shorter connection contracts.