Defining the Bandwidth Marketplace
Answer the following questions to define the Merkato bandwidth
marketplace.
- How much bandwidth
do you want to release to the market? The price of bandwidth
sold in the Merkato system varies according to the level of demand. You
can stimulate demand by reducing amount of bandwidth you make available.
Of course, you sell less total bandwidth this way. At the other extreme,
if available bandwidth always exceeds demand, the market price remains
at your floor price. You can specify the amount of bandwidth to be sold
on the Spot market and on the Reservation market
separately. In the Spot market, you can adjust the capacity at any time
via an Agent interface. Changing the capacity of the Reservation market
requires contacting your Merkato administrator.
- What pricing levels
do you want to create for the reservation market? Your administrator
sets the prices on the Reservation market using a rate table you dictate.
You can set pricing based on the amount of bandwidth the buyer requests
and on the length of time for which the buyer requests it. The table uses
price points that you define. By default, Merkato 2.2 supports four time
levels and five quantity levels (a total of 20 price points), but this
can be increased. You also specify a cancellation fee. The cancellation
fee is a percentage of the remaining value of the contract, charged if
the buyer terminates a reservation prematurely.
- What floor price do
you want to set for the Spot market? In the spot market, bidding for
bandwidth always begins at the floor price you set. This price is configured
dynamically via an agent you control. Changes take effect at the start
of the next round of bidding.
- Do you want to create
buy-back agents to automatically control the supply of bandwidth?
Buy-back agents have the effect of dynamically releasing bandwidth to
the marketplace at fixed price points. These artificial buyers bid at
certain price points and quantity levels and “win” the bandwidth until
they are outbid by true buyers. (You should reveal this to the real customers
so that they do not feel you are unfairly manipulating the market.)
- Do you wish buyers
to access spot and reservation markets through a single agent or through
separate agents? Normally, users use a single username and password
to access both the spot and reservation agents. The buyer selects the
agent to download from either the spot garage or the reservation garage.
Alternatively, both agents can be kept in the same garage, but must be
accessed via different usernames. (These usernames should be chosen to
indicate which market they apply to.) The convenience of logging in with
a single username may outweigh the slight inconvenience of selecting the
proper garage—this is your choice.
- How often would you
like spot market auctions to be run? By default, spot market auctions
run as often as possible¾every
five minutes or so. We recommend running auctions as often as possible
to provide buyers with the fastest possible response time to their changes.
If, for some reason, you want to run auctions less often, your Merkato
administrator can increase the pause time between auctions. By default,
the pause time is just long enough to allow allocations to be configured
in the network before the next auction starts. Pause time can be increased
to lengthen the time between auctions. When you lengthen the time between
the auctions, the auctions themselves last for the same duration.
Configuring many of these options is discussed in Merkato
Auction Mechanism: The Progressive Second Price Auction.
Seller Type-of-Service Options
This section discusses seller options related to the qualities
of the bandwidth being sold. These options include identification of buyer
flows, in which direction bandwidth is controlled, and how capacity utilization
is limited.