Co-founder of Weaver Labs, a B2B tech start-up building an open marketplace of Telecommunications assets. My role is to align the commercial, operational and technical activities of the company, building long-term strategy and business development to bring our product Cell-Stack to market.
What is a Service Level Agreement and how does it work?
In the context of telecoms, a Service Level Agreement is a contract between a service provider and a client which sets out particular aspects of the service such as quality, availability, and responsibilities. This usually involves a provider and the customer in a chain of services as the resources are used and contracted.
In the context of telecoms, this usually involves a provider and the customer in a chain of services as the resources are used and contracted. For example:
1. Mobile Network Operator (let’s call it MNO A), providing cellular service to a consumer will have an SLA contract with the end customer.
2. MNO A will have to access a tower and a fiber network that may belong to another Service Provider, let’s call it SP B and C, which will result in another SLA contract between MNO A and SP B and C.
As you can imagine by now, these agreements trickle all the way down and can be as granular as the infrastructure itself.
These days in the telecoms community there’s debate about accessing Infrastructure as a Service, sharing models, and the most controversial of all: migrating to the public cloud. Inevitably, this shift toward a Network of Networks where service providers access infrastructure that is more and more distributed will stress the need to modernize telco Service Level Agreements.
As the infrastructure becomes naturally more decentralized as a result, these contractual agreements become a bottleneck and this often hinders the adoption of sharing models.
So the question that needs to be asked here is, how can blockchain technology provide a remedy to this?
First, we need to understand the complex nature of Service Level Contracts and why this matters:
The complexity of current contracts:
This dependency on SLA inheritance becomes really complex to monitor: each SLA contract has a number of performance metrics that need to be measured constantly in order to make sure the contract is upheld. Examples of these metrics are accessed bandwidth (your classic speed), availability of the network (how often can it go down?), the response time (how fast?)…
In the event of a fault, the steps for reporting issues as well as the response time-frames increase with the complexity of the infrastructure setting, the more infrastructure providers in the supply chain, the more steps and therefore more complexity in up-keeping the contract levels.
Also, in this case, MNO A (from the example above) will be dealing with multiple suppliers at the same time which will offer different contract terms and most likely very different ways of management. However one of the most concerning parts of these is the resulting Quality of Service (QoS), which will be an aggregation of the QoS provided by all suppliers.
This complexity might be solved by having fewer providers in the supply chain and reducing the number of contracts needed to provide services to the end consumer. However, this centralised approach often results in fewer incentives for the large infrastructure owner to maintain the SLA as there is obviously less competition in the market, and the centralised authority will tend to pursue individual goals.
More importantly, the market is moving towards infrastructure as a service with more suppliers providing infrastructure to be used for services. The future is a Network of Networks, and the complexity will continue to grow.
How blockchain offers a new alternative:
The telco industry is experiencing a shift towards full software based and cloud-native, which means we have a large set of tools we can use to address these challenges.
The first thing we should be asking is: what makes the supply chain of telco challenging to manage? This is a lack of reliable information, trust in the service being contracted, and inability to act fast in case of failure.
With the use of software tools, we can now access better real-time network monitoring and incorporate new ways of metering the usage of network and compute resources, which in combination with orchestration and automation can help address monitoring the level of service being provisioned. This provides real-time reliable information as well as service management in case of failure.
A centralised management of a large set of providers can be very complex, even in the case of fully-automated SLA management. Technologies that introduce viable ways of doing decentralized contract management offer a solution to minimize the complexity and bring agility to the marketplace.
Deploying a simple yet effective architecture:
Using distributed ledger technologies, such as blockchain which support the use of Smart Contracts and Oracles offer a simple solution to contractual enforcement and management with multiple participants.
A blockchain records digital events or transactions in a distributed database shared among the network participants. Smart contracts are programs that execute the terms of a contract. When a condition is met, an action is automatically executed in a transparent and auditable way, for example, the payment for a service.
The use of blockchain can help simplify the discovery of assets and improve trust and security in registering and managing transactions as well as payments in exchange of services. The smart contracts will keep all this information in the form of a computer program. In a very simplified form, we put blockchain at the centre of handling:
The marketplace of Assets: a repository of assets where all contributors to the supply chain register a catalog of services, with determined allowed quotas and resources to be accessed as a service. The marketplace is in charge of brokering services between the providers in the supply and those demanding services.
Smart Contract Handling:
MNO A from the previous example will browse all available assets in the marketplace, negotiate conditions and finalise the acquisition of services in the form of a smart contract. The smart contract will regulate the provision of the services.
Service monitoring: this block is in charge of monitoring the service execution and publishing this data into the blockchain to be used as evaluation of the conditions of the smart contract, i.e., upholding the agreed quality of service.
Blockchain will help transform traditional Service Level Agreements with the development of smart contracts. With the rising demand for telecom-driven applications like the Metaverse and IoT, incorporating blockchain into contract agreements encourages further investment into the telecoms supply chain.
In turn, blockchain can better support diversification of the traditional telecoms contract model and also has the potential to bridge the gap between demand and supply with increased vendor competition creating scalable telecoms networks.