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The Ladder
How money is connected to multiplexing
Dr Neil Davies
Predictable Network Solutions Ltd
Peter Thompson
Predictable Network Solutions Ltd
Martin Geddes
Martin Geddes Consulting Ltd
PREDICTABLE
NETWORK
SOLUTIONS
© 2013 All Rights Reserved
Dr Neil Davies
Co-founder, Predictable Network Solutions Ltd
Peter Thompson
CTO, Predictable Network Solutions Ltd
Martin Geddes
Founder, Martin Geddes Consulting Ltd
PREDICTABLE
NETWORK
SOLUTIONS
The only ex ante network performance
engineering company in the world.
Consultancy on the future of
telecoms and the Internet.
PREDICTABLE
NETWORK
SOLUTIONS
PREDICTABLE
NETWORK
SOLUTIONS
Sustainable Broadband Economics Workshop
London, 22nd May 2013
Fundamentals of Network Performance Workshop
London, 24th May 2013
www.sustainablebroadband.com
Setup
The
Ladder
The
Rungs
The
Multi-
plexing
The
Money
The
Trouble
The
Solution
PREDICTABLE
NETWORK
SOLUTIONS
Substance
Overview
The
Ladder
The
Rungs
The
Multi-
plexing
The
Money
The
Trouble
The
Solution
PREDICTABLE
NETWORK
SOLUTIONS
REVENUE
How are
network
operator
costs and
revenues
connected?
COSTS
COSTS
REVENUE
The “Ladder”
provides the
causal links
COSTS
REVENUE
REQUIRES
ENABLES
It is a chain of
reasoning
Each ‘rung’ enables
the one above…
…and requires the
one below
ENABLES REQUIRES
COSTS
REVENUE
REQUIRES
ENABLES
Hard
constraints:
no escape!
COSTS
REVENUE
REQUIRES
ENABLES
It helps us to
answer the
question:
How can the
network operator
maximise profits?
-
+
COSTS
REVENUE
REQUIRES
ENABLES
Why care?
Failure to
understand and
exploit these simple
causal relationships
creates
enormous
waste
and
missed revenue
opportunities
Overview
The
Ladder
The
Rungs
The
Multi-
plexing
The
Money
The
Trouble
The
Solution
PREDICTABLE
NETWORK
SOLUTIONS
REVENUE
What causes
users to pay
network
operators?
REVENUE
Network users
can have good
experiences

or
bad
experiences

FIT-FOR-PURPOSE
EXPERIENCE
REVENUE
Revenue is a
result of
delivering
fit-for-purpose
experiences




FIT-FOR-PURPOSE
EXPERIENCE
REVENUE
What is a
‘fit-for-
purpose’
experience?
FIT-FOR-PURPOSE
EXPERIENCE
REVENUE
Good experiences




sufficiently common
+
Bad experiences

sufficiently rare
FIT-FOR-PURPOSE
EXPERIENCE
REVENUE
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
View a
web page,
watch a video,
download an
e-book:
Those
experiences are
outcomes of
computation.
REVENUE
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
Outcomes
Examples of good
outcomes:
watch a movie,
talk to your granny
Examples of bad
outcomes:
‘circle of death’,
poor voice quality
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
Flows
Computational
outputs require
data inputs!
A network delivers
individual and
aggregate flows of
packets to enable
this computation
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
Flows
Good outcomes:
Require flows with
bounded packet
loss and delay
Bad outcomes:
Experience flows
with excessive
packet loss or delay
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
Demand
+
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
Demand
• Highly
heterogeneous
• Has strong internal
couplings
COSTS
Where do
network
operator costs
come from?
COSTS
TIN
Tin
Any physical
substrate
Spectrum, fibre,
copper, ducts, street
cabinets, cell
towers, and the
(unpowered)
transmission and
routing equipment
COSTS
MECHANISMS
TIN
Mechanisms
Active data links,
operating queues in
routers, radio
network controllers
COSTS
MECHANISMS
TRANSMISSION
TIN
Transmission
The complete
system for moving
data from A to B
Transmission is
what the network
does
rather than what it
is
COSTS
MECHANISMS
TRANSMISSION
TIN
Supply
-
COSTS
MECHANISMS
TRANSMISSION
TIN
Microseconds
Minutes
Months
Timescales
We can create and
reallocate supply at
different timescales
COSTS
MECHANISMS
TRANSMISSION
TIN
Supply
Scales together:
extra resources at
one level need more
of everything below
COSTS
REVENUE
MULTIPLEXING
Multiplexing
How are costs and
revenues
connected?
COSTS
REVENUE
MULTIPLEXING
Multiplexing
This is where supply
and demand meet
COSTS
REVENUE
FIT-FOR-PURPOSE
EXPERIENCE
MULTIPLEXING
TIN
Shares the
fixed and
finite
resources
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
MECHANISMS
TRANSMISSION
REQUIRES
ENABLES
TIN
MULTIPLEXING
The
Ladder
COMPUTATIONTRANSLOCATION
Overview
The
Ladder
The
Rungs
The
Multi-
plexing
The
Money
The
Trouble
The
Solution
PREDICTABLE
NETWORK
SOLUTIONS
What is multiplexing?
Over-simplification ahead
(many important statistical issues omitted)
Simplest case
A
B
C
D
Visualising multiplexing
Input data flows
Before
A
B
C
D
Visualising multiplexing
Input data flows TransmitMux
Before
A
B
C
D
Visualising multiplexing
A
B
C
D
Input data flows TransmitMux Demux Output data flows
Before After
A
B
C
D
Packets get lost
A
B
C
D
Before After
LOSS
A
B
C
D
Packets get delayed
A
B
C
D
Before After
DELAY
A
B
C
D
Quality of Experience (QoE) failures
A
B
C
D
Before After


QoE FAILURE
 Bad experiences are caused by
excessive loss and delay
A
B
C
D
Visualising multiplexing
A
B
C
D
Before After
DEMAND SUPPLY SUPPLYDEMAND
A
B
C
D
We have (scheduling) choices!
A
B
C
D
Before After
What to lose? What to delay (and by how much)?
How to avoid QoE failures?
COSTS
REVENUE
FLOWS
TRANSMISSION
MULTIPLEXING
Matches
instantaneous
demand to
supply
+
-
COSTS
REVENUE
FLOWS
TRANSMISSION
MULTIPLEXING
Schedules
packets (from
flows) for
transmission
COSTS
REVENUE
CONSUMER
PRODUCER
TRADER
Option
trading space
(Advanced class only!
More information in
our workshops…)
+
-
Danger! Advanced
mathematics ahead!
COSTS
REVENUE
MULTIPLEXING
A statistical
process –
like a game of
chance
How does this
game of chance
work?
It’s a tussle
Network
users
Network
operators
Bad coincidences
cause  experiences
More network use and users
make bad coincidences
more likely
Resource efficiency
LOW HIGH
MULTIPLEXING
Capacity demand
LOW HIGH
MULTIPLEXING
Feasible Infeasible
MAX CAPACITY
Risk of bad coincidences
LOW HIGH
MULTIPLEXING
Increases with load
Flowefficiency
LOW
HIGH
MULTIPLEXING
Flowefficiency
LOW
HIGH
MULTIPLEXING


Schedulabilitydemand
LOW
HIGH
Feasible
Infeasible
MAX SCHEDULABILITY
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH
MULTIPLEXING
Strong flow isolation
= Happy users
High stat mux gain
= Happy operator
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH
?
?HELL
HEAVEN
MULTIPLEXING
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH
Feels to users like the
network is empty,
even when it is full!
MULTIPLEXING
HEAVEN
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH
Requires lots and lots
of good coincidences
& very few bad
coincidences
MULTIPLEXING
HEAVEN
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH
MULTIPLEXING
HEAVEN
By tipping the odds
through effective
scheduling
COSTS
REVENUE
MULTIPLEXING
Success
Depends on how
well you do this
scheduling
• Affects user fitness-
for-purpose and QoE
hazards…
• …as well as tin
required and cost
hazards…
• …and thus profit and
risk
COSTS
REVENUE
MULTIPLEXING
Failure
Poor flow isolation
(too many bad
coincidences)
Poor resource usage
(too much
over-provisioning
or unused capacity)

£
COSTS
REVENUE
MULTIPLEXING
Predictability
Can only play the
game of chance if
you know the odds.
If you don’t know
the odds, or they
keep changing as
you play,
then you lose!
Overview
The
Ladder
The
Rungs
The
Multi-
plexing
The
Money
The
Trouble
The
Solution
PREDICTABLE
NETWORK
SOLUTIONS
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING
Revenue
£
ANY NETWORK SERVICE
VALUE IN USE The customer
doesn’t care about
operator revenue
They seek
value-in-use
ANY NETWORK SERVICE
VALUE IN USE
FIT-FOR-PURPOSE
EXPERIENCE
Effective Task
Substitution
Value-in-use comes
from substituting for
another task that
has higher costs
and/or lower
benefits.
Fitness-for-purpose
is when this
substitution occurs.
COSTS
ANY NETWORK SERVICEVALUE IN USE
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
Two
perspectives
• Customer
• Service operator
ANY NETWORK SERVICEVALUE IN USE
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
Two
perspectives
They don’t concern
themselves about
the same things
ANY NETWORK SERVICEVALUE IN USE
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
FLOWS
BENEFIT
KEY
PAYMENT
Benefits
• Payment is
typically for data
flows across the
network
• This is at a
different logical
level to what the
customer values
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING
Costs
£
COSTS
ANY NETWORK SERVICEVALUE IN USE
PAYMENT
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
COST
KEY
PAYMENT
User costs
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
KEY
PAYMENT
Capex
Scales according to
how much tin is
required
Halving the
scheduling efficiency
doubles your capex!
COST
PAYMENT
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR
EVERY
ACTIVITY
PAYMENT
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
COST
KEY
PAYMENT
Opex
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING
Risks

CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR
EVERY
ACTIVITY
PAYMENT
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
PAYMENT
Hazards
Things can
(and do)
go wrong
BENEFIT
COST
KEY
HAZARD
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR
EVERY
ACTIVITY
PLAN B
FAILURE
PAYMENT
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
PAYMENT
BENEFIT
COST
KEY
HAZARD
Hazards
The Customer
experiences QoE
failures & must
insure against
excess risk
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR
EVERY
ACTIVITY
PLAN B
FAILURE
PAYMENT
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
PAYMENT
Hazards
The network
operator has SLAs &
may require
unplanned capacity
upgrades
CAPACITY
BENEFIT
COST
KEY
HAZARD
REFUND
CAPEX FOR EVERY ASSET
ANY NETWORK SERVICEVALUE IN USE
OPEX FOR
EVERY
ACTIVITY
PLAN B
FAILURE
PAYMENT
CUSTOMERDOMAIN
SERVICEOPERATORDOMAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
PAYMENT
Hazards
The size of the
hazards are all
directly related to
how well we do the
multiplexing
Our experience is
that these hazards
are poorly modelled
in broadband
networks (if at all)
CAPACITY
BENEFIT
COST
KEY
HAZARD
REFUND
Overview
The
Ladder
The
Rungs
The
Multi-
plexing
The
Money
The
Trouble
The
Solution
PREDICTABLE
NETWORK
SOLUTIONS
COSTS
REVENUE
How well are
network
operators
playing the
game of
chance?
CAPEX FOR EVERY ASSET
TELEPHONY SERVICEVALUE IN USE
OPEX FOR
EVERY
ACTIVITY
TRAVEL TO
LONDON
FAILED
CALL
CALL
CHARGE
CUSTOMERDOMAIN
NETWORKOPERATORDOMAIN
FLOWS
OUTCOMES
FIT-FOR-PURPOSE EXPERIENCE
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
CALL
CHARGE
BENEFIT
COST
KEY
HAZARD
REFUND
Fixed
Telephony
Costs and revenues
in balance
Hazards well
contained and
managed
Life used to be
simple and good…
But then we changed…
Time-division
multiplexed
circuits
Packet-based
statistical
multiplexing
Complete phase
and flow isolation
Weak phase
and flow isolation
TELEPHONY BROADBAND
Game of
chance
was easy
Game of
chance is
hard
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH TDM
(core)
MULTIPLEXING
TDM
(edge)
TDM for voice had highly-
utilised network cores, and
low peak-to-mean at the
network edge
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH
MULTIPLEXING
TDM
For bursty data,
TDM is highly
inefficient, even
if it is very
effective
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH
IP
(core)
MULTIPLEXING
IP is both efficient and
effective in the core for
many kinds of data
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH
IP
(access network)
MULTIPLEXING
However, IP is
much weaker at
the network edge.
Why is this?
Resource efficiency
Flowefficiency
LOW HIGH
LOW
HIGH
IP
(access network)
MULTIPLEXING
HEAVEN
Resource efficiency
Flowefficiency
LOW MEDIUM
LOW
HIGH
MULTIPLEXING
HIGH
IP
(access network)
HEAVENHEAVEN
Heaven gets further away
Resource efficiency
Flowefficiency
LOW MEDIUM
LOW
HIGH
MULTIPLEXING
HIGH
IP
(access network)
Ineffective scheduling forces
reliance on over-provisioning
(to try to make bad
coincidences rare)
- which has diminishing
returns
HEAVENHEAVEN
Resource efficiency
Flowefficiency
LOW MEDIUM
LOW
HIGH
MULTIPLEXING
HIGH
Current approaches are
infeasible to schedule at
high load
IP
(access network)
Resource efficiency
Flowefficiency
LOW MEDIUM
LOW
HIGH
MULTIPLEXING
HIGH
IP
(access network)
Network collapses
We want to know!
Are network
operators
delivering fitness-
for-purpose and
good outcomes
We want to know!
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USE
CUSTOMERDOMAIN
NETWORKOPERATORDOMAIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE
EXPERIENCE
? Have lost
visibility and
control over
outcomes
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USE
CUSTOMERDOMAIN
NETWORKOPERATORDOMAIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE
EXPERIENCE
The broadband
industry is
delivering
purpose-for-
fitness,
not
fitness-for-
purpose
?
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USE
CUSTOMERDOMAIN
NETWORKOPERATORDOMAIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE
EXPERIENCE
Schedulability
has been
largely
abandoned
(although the
issues are
omnipresent)
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USE
CUSTOMERDOMAIN
NETWORKOPERATORDOMAIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE
EXPERIENCE
At best we
compete on
transmission
speed, which is
only a weak
proxy for
outcomes
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USE
CUSTOMERDOMAIN
NETWORKOPERATORDOMAIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE
EXPERIENCE
Marketing
focus on
mechanisms
and tin
(4G! Fibre!
3GPP rel 22!?!)
We want to know!
Are user QoE
hazards being
sufficiently
managed and
mitigated
We want to know!
CAPEX FOR EVERY ASSET
INTERNET SERVICE PROVIDERVALUE IN USE
MAKE A
PHONE
CALL
FAILED
VIDEO
LINK
CUSTOMERDOMAIN
NETWORKOPERATORDOMAIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE
EXPERIENCE
Lack of service
assurance
means users
cannot depend
on broadband
services:
creates hidden
costs
We want to know!
Is tin being used
efficiently and
effectively to
deliver flows
We want to know!
LOTS OF UNNECESSARY CAPEX
INTERNET SERVICE PROVIDERVALUE IN USE
CUSTOMERDOMAIN
NETWORKOPERATORDOMAIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE
EXPERIENCE
Using tin to
solve what are
rightly
scheduling
problems
Huge
misallocation
of capital

We want to know!
Are operators
appropriately
managing and
mitigating their
cost hazards
We want to know!
UNPLANNED CAPEX SPENDING
INTERNET SERVICE PROVIDERVALUE IN USE
CUSTOMERDOMAIN
NETWORKOPERATORDOMAIN
FLOWS
OUTCOMES
MULTIPLEXING
MECHANISMS
TRANSMISSION
TIN
FIT-FOR-PURPOSE
EXPERIENCE
CAPACITY
Have taken on
new contingent
liabilities
Uncosted, and
not seen in
balance sheet
Overview
The
Ladder
The
Rungs
The
Multi-
plexing
The
Money
The
Trouble
The
Solution
PREDICTABLE
NETWORK
SOLUTIONS
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING
Service
Assurance
How can we restore
link to outcomes
and fitness-for-
purpose?
Then more can be
charged for reducing
user QoE hazards
COMPUTATIONTRANSLOCATION
COMPUTATIONTRANSLOCATION
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING
Quality
Transport
Agreements
• How can we
formally describe
the requirements
of demand and
capabilities of
supply?
• How can we
create digital
supply chains?
COMPUTATIONTRANSLOCATION
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
Polyservice
networks
How can we match
diversity of demand
with an appropriate
diversity of supply?
DEMAND SUPPLY
COSTS
REVENUE
FLOWS
OUTCOMES
FIT-FOR-PURPOSE
EXPERIENCE
MECHANISMS
TRANSMISSION
TIN
MULTIPLEXING
Advanced
Trading Spaces
How can we match
supply and demand
at all timescales?
Microseconds
Minutes
Months
Sustainable Broadband
Economics Workshop
London, 22nd May 2013
Fundamentals of Network
Performance Workshop
London, 24th May 2013
www.sustainablebroadband.com
PREDICTABLE
NETWORK
SOLUTIONS
Neil Davies
Neil.Davies@pnsol.com
Peter Thompson
Peter.Thompson@pnsol.com
Martin Geddes
mail@martingeddes.com
PREDICTABLE
NETWORK
SOLUTIONS

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