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Center for Applied Internet Data Analysis > publications : papers : 2014 : volume_based_transit_pricing
Volume-based Transit Pricing: Is 95 The Right Percentile?
V. Reddyvari Raja, A. Dhamdhere, A. Scicchitano, S. Shakkottai, k. claffy, and S. Leinen, "Volume-based Transit Pricing: Is 95 The Right Percentile?", in Passive and Active Network Measurement Workshop (PAM), Mar 2014, vol. 8362, pp. 77--87.
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Volume-based Transit Pricing: Is 95 The Right Percentile?

Vamseedhar Reddyvari Raja3
Amogh Dhamdhere1
Alessandra Scicchitano2
Srinivas Shakkottai3
kc claffy1
Simon Leinen2

CAIDA, San Diego Supercomputer Center, University of California San Diego


SWITCH, Switzerland


Texas A&M University, College Station

The 95th percentile billing mechanism has been an industry de facto standard for transit providers for well over a decade. While the simplicity of the scheme makes it attractive as a billing mechanism, dramatic evolution in traffic patterns, associated interconnection practices and industry structure over the last two decades motivates an obvious question: is it still appropriate? In this paper, we evaluate the 95th percentile pricing mechanism from the perspective of transit providers, using a decade of traffic statistics from SWITCH (a large research/academic network), and more recent traffic statistics from 3 Internet Exchange Points (IXPs). We find that over time, heavy-inbound and heavy-hitter networks are able to achieve a lower 95th-to-average ratio than heavy-inbound and moderate-hitter networks, possibly due to their ability to better manage their traffic profile. The 95th percentile traffic volume also does not necessarily reflect the cost burden to the provider, motivating our exploration of an alternative metric that better captures the costs imposed on a network. We define the provision ratio for a customer, which captures its contribution to the provider‛s peak load.

Keywords: economics, measurement methodology
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