Equitable transit charges for multiadministration telecommunications networks

We study a multi-administration telecommunications network that is an abstraction of an international network. The nodes represent separate telecommunications administrations that are linked such that alternately-routed calls go through one tandem administration. The cost of the group of circuits between a pair of administrations is borne by them; and when a call between the pair is alternately routed through the tandem node, then the two administrations share the call revenue and pay transit fees to the tandem administration. The numbers of circuits between the administrations are selected to yield a least-cost network that provides a desired level of service, in terms of blocking probabilities, over an entire day. We address the problem of determining transit charges for the alternately-routed calls that are equitable for all of the administrations. Our approach is to derive such charges by equating the system-optimal circuit group sizes to certain hypothetical administration-optimal circuit group sizes. This approach may be of use in other system design problems involving cost sharing among several companies.This research was supported in part by Grant AFOSR 84-0367.