For most applications, Merkato uses the control router’s ability to apply rate limits to traffic streams to enforce bandwidth allocations. In this mode, allocations are dedicated to buyers whether they use them or not.
Merkato also supports a less restrictive method of limiting bandwidth, which amounts to “bandwidth insurance.” Bandwidth insurance is implemented using weighted fair queue settings on the control router. In this mode, bandwidth allocations only guarantee a minimum amount of capacity that the buyer’s traffic will receive. If buyers do not use their full allocations of bandwidth, the excess bandwidth is returned to a common pool that all buyers can use. In the limiting case, a buyer could potentially use all the available bandwidth while purchasing a very small amount, assuming that all other buyers are not using their allocation during that time period.
We typically do not recommend using the “bandwidth insurance” mode; it tends to make the market for bandwidth collapse except during times of congestion. Only in cases where demand exceeds supply frequently, but supply cannot be increased, have we seen value in this mode of operation.