L. Jean Camp Jean_Camp@harvard.edu
Kennedy School of Government
L213
Harvard University
79 JFK St.
Cambridge MA, 02138
Rose P. Tsang, rtsang@ca.sandia.gov
Senior Member of Technical Staff
MS 9011
Sandia National Laboratories
PO Box 969
Livermore, California 94551
Abstract
1. Introduction
2. An Extremely Brief History of Universal Service
3. Phone Service Interruptions - Failures of Universal Service
4. Quality of Service Proposals as Universal Service Proposals
4.1 Expected Capacity Service
4.2 Dynamic Packet Auctions
4.3 RSVP
5. Conclusions
References
Why do Americans lose their phone service? What functions of protocols could support or undermine universal service? Why don't all Americans who are passed by cable television subscribe? If communications protocols were optimized for universal access, what characteristics would such protocols have? How do proposed Internet services compare with a theoretically optimal protocol with respect to universal service?
Pricing for packet-switching has focused on economic efficiency (e.g. Mackie-Mason 1995; Choi, Stahl, & Winston, 1997; Shapiro & Varian, 1998), billing to encourage widespread adoption of network innovations (e.g. Xie & Sirbu 1985) and billing in a manner consistent with the underlying network (e.g. Clark, 1996). Here we look at billing Internet services with respect to universal service.
Universal service has traditionally been based upon two fundamental assumptions: that there exists a single service to which all are entitled and providing this service is a function of geography. The single service to which all are entitled, plain old telephone service (POTS), is local voice access bundled with traditional toll service (i.e., long distance service). The first assumption is increasingly meaningless, as telephony and data networking merge. The second assumption is flawed in the case that the infrastructure investment has been recovered, or is wireless.
The bundling assumption is an increasingly irrational selection of exactly two data services out of the many. Consider, for example, that text-based access to governmental data and job openings may be more valuable than voice toll service. Yet, despite its flaws, any universal access regime will be built upon the voice-based universal service regime. While the technological assumptions of universal service are dated, the importance of citizen access to information and communications are increasingly important. With the rise of xDSL and the continued popularity of telephone-based modems, telephony's universal service may be the backbone of the information age's universal access.
We begin by describing telephony's mechanisms for funding universal service through inter-customer, inter-company and intra-company payments. Historically, a constant quality of service has been in conflict with universal service. We argue that the future problems with universal service will not be the simple penetration rates problems of today, but will be more subtle issues of availability and quality of service. (The penetration rate is the percentage of households with POTS, it is broken down by income, race, age, geography, and family structure.) We show that the current regulatory mechanisms are inadequate for a competitive market where a continuous variable, quality of service, not a Boolean variable, existence of service, is key.
We then discuss protocols which include mechanisms for quality of service, and consider how the services available with each would influence universal service. We focus on how these new quality of service protocols for packet-switched networks, and the pricing structures these protocols enable, can provide universal service in digital networks. We show how implementation of these protocols in a competitive environment can result in broader access to communications service than is the case today.
Universal service has failed poor families users in urban areas; the young more than the old; and the native speaker less often than those who speak English as a second language. The profile of those without telephone service is described in more greater detail in Section 2. Their reasons are primarily that toll pricing that is perceived as random, and an initial deposit is required. We discuss secondary issues for loss of service and how advanced services could help, or aggravate, the underlying problems. We illustrate how different modes of operation could support pricing models which address the continuing failures in the universal service regime. We argue that the critical components to support universal are end user feedback, entry controls, and support of both best-effort traffic as well as guaranteed service traffic.
Telephone service providers use explicit, delayed feedback to influence user behavior. Through pricing, providers attempt to offer only as much as their networks will bear. By requiring deposits, they limit their exposure to customer abuse. Through pricing differentials companies attempt to level network use, and succeed in increasing pricing uncertainty. For example, the need for a deposit illustrates how telephone companies' needs to limit risk and the consumers' need for service have been in conflict. Quality of service and bandwidth reservation technologies combined with best effort service can resolve some of these conflicts.
Telephone companies can provide real-time feedback to users about service availability; for example, through denial of service as soon as a specific call reaches a given cost threshold, or at some user-selected monthly total charge. The potential for denial of service at the entry point would remove the need for a deposit.
Companies can provide highly affordable best effort service at a consistent price. This would level network usage in a real time manner and remove consumer uncertainty. Today companies use rough measure of providing price incentives in time periods other than peak and this creates uncertainty for less informed consumers. Companies build for peak to ensure that highly profitable corporate data does not encounter congestion. Best effort service could provide affordable, constant rate, toll access off-peak. There would be short term denial of service as opposed to long term loss of service. Publicly available AT&T data suggests that this denial of service would occur only between 9-10 am weekday mornings. Currently companies can, and some do, offer a maximum monthly charge yet the customer can neither negotiate this maximum with any degree of granularity nor negotiate it periodically. The ability to control one's own bill would remove uncertainty and provide families the ability to control their monthly expenditure on communications services. All of these services and changes are possible with any set of protocols which provide end user feedback, entry controls, and support of best-effort traffic.
We argue that usage-based pricing can be as compatible with universal service than flat rate, in contrast to (Anania & Solomon, 1988). The requirements such a usage-based system are that it provides mechanisms which remove uncertainty for the consumer, unbundle services, and support.
These services point to promise in providing universal service. Convergence, as a technical reality grounded in well defined protocols, will alter universal service. We take an optimistic approach, but our optimism is supported by the history of telephony penetration, the practice of building for peak loads, and the capacities of next generation networking protocols.
The Internet and telephony were traditionally based upon very disparate engineering technologies (i.e., packet switching and circuit switching, respectively) as well as very different types of service offerings. The Internet has used best-effort data traffic for e-mail and file transfers, and telephony has used guaranteed low bit-rate circuits for voice traffic. The convergence of these networks has resulted in the proposal of packet switched networks containing protocols which provide quality of service (QoS) mechanisms. The economics of the resulting packet network may violate the fundamental assumptions on which universal service funding is built. Thus a new consideration of universal service is needed for next generation networks.
Universal service is targeted at two groups: rural subscribers who may be unable to support the infrastructure necessary to provide service and the urban poor. Wireless technologies have made the issue of wired infrastructure, and thus considerations of distance, increasingly unnecessary. As the politics of universal service are not at issue here, for the remainder of this work we will focus on the poor and not consider distance issues.
What is needed is a universal service model for a packet-switched network which supports both best effort traffic and traffic with guaranteed quality of service. It would not be ideal to have a new paradigm for universal service based on a packet switched networks with only best-effort service developed just in time to be obsolete in the face of next generation networking.
The concept of universal service came out of the agreement between the United States Government and AT&T, then headed by Theodore Vail. All other nations had or were in the process of nationalizing their telephone systems as an extension of the postal system. In contrast in the United States, despite a short interlude of government ownership (Brooks, 1975) AT&T became a regulated monopoly.
In fact, AT&T has never been the only phone company in the United States. Even after the creation of the FCC small rural phone companies existed (with which AT&T was required to interconnect following the Kingsbury Commitment). There is some argument over whether universal service was more effective pursued under a regulated monopoly of with competition. There is no debate that universal service with a single quality of service did not exist until after implemented by AT&T. Rural cooperatives had low qualities of service both in the times of provision and signal quality. In a farmer-owner cooperative the owners ran the switchboard in between other responsibilities, line repairs were made when possible, and phone lines were often wire fencing doubling as a transmission medium (Fischer, 1992). Thus quality of service has historically been inversely related to the widespread adoption of services.
The universal service fund is actually a misnomer, rather than a fund universal service is supported by series of exchanges and payments made between carriers. Long distance carriers pay local exchange carriers, with the assumption that long distance calls are dominated by the affluent subscribers who can afford the subsidy. Universal service has been implemented through separations and settlements. Separations are the payments made by one company to another, settlements are the payments made between divisions of the same company.
The payments subsidize basic services, qualifying individual households, and qualifying institutions. The universal service fund has been expanded to include connecting schools and libraries to the Internet. In practice this means that every qualifying school or library can obtain connections for Internet services for less than the market rate. This is the first extension of universal service beyond common carriage. Previously only the mail and telephones came under universal service. Radio and television have not been subject to universal service in the United States; however, this is not true for all nations. For example, in the Soviet Union and China instead of having individual radios, loudspeaker systems piped news to all common areas. In West Germany everyone has the right to a radio for the public safety purpose of emergency planning and response. Yet in the United States universal service effectively continues to mean plain old telephone service with no subsidy for cable penetration, wireless penetration, or even availability of pay phones.
In the previous section we described the goals and philosophy of universal service. In summary: telephone service is subsidized for a targeted population. Broadcast services are not subsidized. Internet services are subsidized for qualified educational institutions. In additional postal services are subsidized for rural households and institutions by Constitutional requirement.
The most complete study of universal service losses to date (Mueller & Schement, 1996) showed that loss of phone service can be predicted by income, ownership of assets, and age of the head of household. In fact age of head of household predicts that young families are the most likely not to have phone service.
The primary reason for loss of service is a high toll call bill. Toll call costs are unpredictable unless the caller understands the charging mechanism and can control all the calls made by all members of the household. Local call charges are billed periodically, not usage-based, and provide monthly feedback about costs. Tolls calls are increasing flat rate, usage-based and continue the historical pattern of providing monthly feedback about pricing. Historically toll call rates have based on predicted congestion and have been priced by time of day. Toll calls were also historically priced according to cost of the infrastructure, and thus vary by distance. While time charges are not uncommon (e.g. 5 cent Sundays) telephony pricing mechanisms are becoming increasing based only on duration of the connection.
Consider billing as economic feedback. Phone calls are billed monthly thus providing periodic pricing feedback. The decision to accept a connection or make specific call is not directly linked to the payment for that call.
Other common reasons for loss of phone service are large calling card or collect call charges. In all three cases the charges can be made by parties who are not responsible for the phone bill. In the case of collect calls and calling cards the cards may be on a different provider than the one selected by the party responsible for phone service. This results in a remarkable lack of price predictability. All these observations suggest that mechanisms which reduce uncertainty will reduce the incidence of loss of phone services. Mechanisms which reduce uncertainty can either create a constant bill for service, thereby reducing variability, or provide real time feedback about costs.
An unpredictable feature of loss of phone use is that the poor use more expensive telecommunications services per dollar of income than users in any other quintile. Hispanic and African American households spend more on cable TV, long distance, and advanced services (e.g. call waiting) than white households. Certainly the resulting higher rates of disconnection, when linked with lower computer penetration, undermines claims to Internet democracy and points instead to higher divisions of have and have-nots.
Consumption of expensive telecommunications options is one reason for disconnection. This suggests that the to limit overall phone bills would serve universal service. Note that the same groups under-served by credit markets are conversely over-served by telecommunications markets, which function on the credit model.
Other features which might characterize a protocol compatible with universal service include unbundling entertainment from calling, concentrating control in the hands of the party responsible for the phone bill , and protocols with a low information threshold. These would support universal service regardless of the technical mechanism used.
Consider that homes without telephones often have cable television, even premium channels. Thus subscribers can manage their cable bills even though overwhelmed by the phone bill, as evident by disconnection of phone service. Cable television provides valuable services, including new programming. In neighborhoods where children are effectively under house arrest due to high levels of street violence and open drug trades entertainment may provide a more important value than connectivity. Some proposals would link not only tools and local service, but also broadband entertainment access.
Concentration of control in the hands of the party responsible for the bill will increase communications penetration. Calling cards, long distance calls and collect calls enable anyone with access to the physical device to charge calls; thus enabling adolescents, irresponsible guests and relatives to burden the phone owner with uncontrollable charges.
A low information threshold has not been previously identified as a driver of universal service. However, interviews with those who have lost phone service illustrate that there is the conception of uncertainty in billing.
A previous work on universal service characteristics focused upon the structure of the regulatory regime (Gillett, 1994) argued for a regulatory approach to universal service that is compatible with this set of technological specifications in that it argues for making explicit subsidies available directly to low-income users, not defining immature services as essential, ensuring competition, and finally favoring technologies that are digital, scalable, and extensible. In contrast we argue that digital, extensible and scalable technologies are not all created equal. In fact we propose that there exist specific characteristics for quality of service mechanisms which can undermine universal service, or conversely can increase the connectivity of the poor. Furthermore, Mueller & Schement study showed that the services targeted specifically for the poor are not reaching poor young families. Thus the systematic causes of denial of service in a QoS network need to be addressed at a fundamental level in a network which provides both best effort and QoS transmission.
We now consider three protocols proposed for charging for Internet traffic: expected capacity service (Clark, 1996), a smart market (Mackie-Mason & Varian, 1995), and RSVP (Zhang et. al., 1993). We compare the features of these systems to those features which would support universal service.
In the previous section, we identified characteristics of protocols which would facilitate universal service. Such characteristics include: network support for best-effort services as well as guaranteed services, reducing pricing uncertainty by providing feedback about costs, entry controls, more control for the responsible billing party, unbundling of services ,and low user information thresholds. In this section we discuss three QoS network protocols in light of their potential applicability to universal service. The first two schemes perform dynamic bandwidth allocation at the packet level. The third scheme performs dynamic bandwidth allocation at the flow level, i.e., connection-oriented resource reservation.
The Expected Capacity Service is a two level priority scheme proposed in (Clark, 1996). It provides a guaranteed minimum capacity service with a guaranteed burst size allowance provided by a token bucket. Clark considers the scheme in terms of a simple sender-pays model or a more complex receiver-pays model. The sender-pays model is as follows. Each user selects a profile. The profile consists of two measures: minimum rate and token bucket depth (comparable to TCP's window size.) In response to the user's selected profile, the service provider offers a price for the time period (e.g. a month) in which the profile will be enforced. Thus users are provided a fixed and predictable price for their selected profile.
Users make connections and use network services without pricing each individual connection. At the edge of the network, the service provider tags each packet as either being "in" or "out" of the user's profile. At a congested network switch, packets tagged as "out" will be dropped. If no congestion occurs, packets tagged as "out" may be delivered thus providing the user with more effective bandwidth than their selected profile specifies. At non-peak hours, this effectively allows users to consume resources, in a best-effort manner, irrespective of their selected profile without penalizing the performance of other users. This provides a potential mechanism for the distribution of network usage amenable to universal service.
Notice having the receiver pay in all conditions means the sender must know of the receiver's usage profile to properly label packets. For example, if the initial sender requests a web page, the responding server would be required to know the usage profile of the requester to know how to tag the requested item for the receiver-pays model to serve the client's request. To overcome this Clark suggests that the request be sent with the usage profile, so that packets may be tagged appropriately. To enable all complexities of profile to be sent would require active or executable usage profiles. This complicates the scheme remarkably.
This model for pricing the Internet provides the possibility for real time user feedback. As packets get dropped or slowed the users can be notified. If the user is not notified, they may perceive the slowed service and may understand this as indirect notification. The source of the slowed service may or may not be identified. The addition of notification of the user that their connection has changed priority and the reason for the change (total bandwidth out of profile, use at this time not in profile, etc.) would improve this mechanism better suited for universal service.
Some complexity and thus the possibility of information overload is be associated with this service. Pricing feedback should be directly available as the user is selecting the profile.
Authentication could allow only the party responsible for the phone to change the profile so that other parties cannot increase the bill. As the profile is altered periodically and then set for all device users for a given period, this protocol is amenable to user, as opposed to device, authentication.
In (Mackie-Mason and Varian, 1995) a Smart Market for responsive pricing in the Internet is proposed. In this model the user attaches to each packet a bid or amount that the user is willing to pay to get a specific packet through the network. When packets are dropped those packets with the lowest bids are dropped first. Each packet with a higher bid is charged the amount of the lowest bid submitted into the network; i.e. for each packet, the user is charged a threshold that is less than or equal to the amount bid. In the Smart Market approach, pricing is explicitly identified as a form of economic, as opposed to network, feedback. In this, we certainly agree with the authors.
The authors include in the discussion of the Smart Market the proposal that some users can choose to pay nothing and receive only best effort service only. The authors further note that they expect the smart market to be implemented with software so that users do not have to bid on every packet - the authors suggest a possibility that the users halt sending when the price goes above, for example, $0.0001 per packet.
By implementing the packet auctioning as an active response (not controlled by the user at the packet level) which observes user selections and adapts within user controls, this protocol could serve as effectively as the previously described Expected Capacity Service. In this case an agent would search for optimal routes and bids, and the total monthly bill would be some predictable amount. This would also remove the high user information overhead. As economic theory suggests - the importance of people's satisfaction may outweigh the benefits of optimization - so the decrease in user overhead may in fact not decrease the quality of user's expressions of preferences.
Conversely, when implemented with an active user those people bidding must understand the probability of congestion occurrences, and the bandwidth demands their applications make on the network. Users do not know how much money was spent to complete a connection until after the connection is complete. Two transactions which seem identical to a user could have very different costs. Issues of receiver-pays mechanisms were not address. Again when the case is that a sender pays only for the request, while the party contacted pays to transmit an entire Web page, this mechanism may prove flawed.
This protocol is subject to information overload. Note that the need for the head of household to be able to control charges would require authentication for every packet initiated. If the total bill could be periodically set, as with a profile, then occasional user authentication would be adequate. This could be implemented with session authentication, where each user can spend a certain amount. Session authentication and user-specific pricing would increase information overload.
RSVP (Zhang et al, 1993), Resource reSerVation Protocol, is an protocol designed for IP-based networks for setting up end-to-end QoS across a heterogeneous network. In RSVP resource reservation is based upon flows, i.e., streams of data from a source to a particular destination. Each flow has an associated specification (flowspec) which contains information about the QoS of the flow. This information tells each router in the connections which resources the router should reserve for that particular flow. Thus when a user requests a flow setup, the flowspec is propagated to the appropriate branch in the multicast tree where, if each intermediate node is capable of satisfying the flow's requested QoS, the request is accepted. Once a flow is setup it corresponds to a logical dedicated circuit; the flow's QoS are guaranteed until the circuit is explicitly torn down, regardless of potential congestion.
The initial motivation for RSVP was to support more efficient multicast operations. Thus it is based upon a receiver-initiated request model. In more traditional (non receiver-initiated) multicast protocols, a sender would have to know the QoS requirements of all the receivers in their group (e.g., receiver A requests 128 kbps, receiver B requests 2 Mbps, etc.). Clearly, this would require an exchange of a large amount of information between the sender and all receivers, as well as the maintenance of a large amount of dynamic state information.
As mentioned before, most billing situations correspond logically to the sender-pays model. Thus RSVP, being receiver-initiated, is naturally amenable to the receiver-pays model. By enabling receiver-initiated resource reservation, each receiver can reserve the resources it requires and at the same time be assigned a corresponding price for the specific QoS request. Each receiver needs to know only about its own QoS requirements. To support the sender-pays model, an extension to the RSVP protocol must used where the QoS requests are propagated further up the multicast tree to the source node.
There are two pricing methods best suited for RSVP. Pricing may be provided as a fixed and predictable function of the user's requested QoS. The problem with this approach is that network resources become inherently more valuable as utilization, i.e., potential congestion, increases. Thus the price charged would not necessary reflect the immediate "value" of the resources. The other way for pricing a RSVP flow could be as a function of both the requested QoS flow and the network load. However, the problem with this approach is unpredictable pricing for users. The user may not know when they were using more "expensive" network resources, i.e., during peak hours, until after the resources were consumed.
Since in RSVP each application's flow requires a separate flowspec, the unbundling of services follows naturally. However since users must be able to specify the QoS requirements for each application's flowspec, information overload may be associated with RSVP. A possible solution is to provide direct pricing feedback as the user is selecting the parameters for the flowspec.
Authentication should allowing only the person who is responsible for network charges to change the flowspec. As with the smart market this can be implemented with session authentication or by periodically setting a total bill and letting the software determine the requirements.
Concluding this work we explain the impact of the features of the previously discussed QoS protocol mechanisms on the viability of universal service.
The following table lists the characteristics of the QoS mechanisms examined in this work. While the protocols vary with respect to the ability to predict, and therefore control, price, all protocols are built with the assumption of convergence. If convergence results in the bundling of currently separate applications, e.g. pay television and telephony, it is expected that universal service will decrease.
| Expected Capacity | Dynamic Auction | RSVP |
Quality Predictability | Limited | Limited | High |
Price Predictability | Yes | Limited | Yes |
Information Overhead | Limited | High | Medium |
Unbundling | Through Profile | Yes | Through flowspec |
Table 1: Characteristics of Protocols with Respect to Universal Service
From an examination of the above protocols, it appears that there is a trade-off in predictability in quality and predictability in price. Predictability in quality requires reserving network resources regardless of the presence of congestion, which means regardless of the unpredictable actions of others. Predictability in price requires cost-controlling response to scarcity, which leads to variable QoS delivery.
The previous table examined characteristics which we argued in Section 2 affect universal service at least in terms of telephony penetration. Now we consider the technical mechanisms which support the economic characteristics favorable to universal service.
| Expected Capacity | Dynamic Auction | RSVP |
Best Effort Service | Yes | Yes | No |
Realtime User Feedback | Possible | Possible | Possible |
Entry Controls | Yes | No | Yes |
Differentiation of Applications | Possible | Yes, with Info Overload | Yes |
Authentication needed for payor control | To alter profile | Session/User | Session/User |
Table 2: Mechanisms Supporting Universal Service
The Internet, or IP-based services, have promise in that there are technical characteristics which provide the potential to expand universal service. Specifically the ability to offer flat rate best effort service, the potential for authentication before adding a usage-based charge, the potential for unbundling at a detailed level, the ability to offer pricing without requiring an understanding of the underlying billing mechanisms, and finally, the potential for customized service level with specific monthly charges selected in advance. All these features offer promise towards the goal of true universal service.
End user feedback may be of use in providing universal service if real time cost information enables users to control their bills, thus removing billing uncertainty. In addition, the use of entry controls can assist in universal service; Entry controls enable networks to either refuse entry after reaching some trigger point, or refuse services for which there would be further charge. These features would remove all uncertainty and help to control bills. The ideal use of best-effort traffic with respect to universal service is to allow for low cost service without disconnection when subscribers have overspent for premium services.
IP-based services offer a corresponding threat to universal service. The Internet can allow access to multimedia, as well as e-commerce opportunities that could allow connection charges to spiral with little or no advance warning. Without authentication at the personal level, as opposed to the machine level, (the current use of cookies is an obvious example) heads of household have higher levels of financial exposure. Current mergers and the linkage between local service providers and ISP increases the potential for bundling of services so that all connectivity may be lost from one service bill unpaid. The ability to offer complex payment plans increase the potential for information overload, so that subscribers may see unexpected increases in price. The ability to offer customized service can allow consumers to get into debt more quickly by ordering more customized services than their budgets can support.
Before the deployment of any significant network mechanism such as the previously discussed QoS mechanisms, it is crucial to understand the mechanism's impact on the viability of the services it may be expected to support. As seen from experiences with telephony networks, as well as the Internet, once a specific networking technology is deployed its impact on subsequent service offerings is indeed lasting.
Current forecasts of business mergers and regulatory actions suggest that more of the hazards of Internet accessibility will be met than the promise. Thus it is crucial that universal access be considered in the design of protocols for the next generation Internet. This paper provides the information for protocols designers and early adapters to develop and select protocols which can serve universal access.
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