hat the customer receives depends on the relationship between the consumer's data transmission needs and the available bandwidth. If h < K, then bandwidth Kis sufficient for error-free service. Because any transmission will be less than the available bandwidth, there will be no loss of information. Conversely, if h > K, there is a likelihood that some transmissions may be in excess of available bandwidth, resulting in some information loss. Information loss occurs with likelihood 1 - F(K)/F(h), which is the probability that Q is strictly greater than K. How much bandwidth is needed by the consumer? A very large bandwidth may be required to guarantee error-free transmission if the range of transmission levels is substantial. However, if some information loss is tolerated, it may be possible to substantially reduce capacity requirements. By truncating the upper tail of the distribution of transmission, capacity can be reduced without much loss of information. This is illustrated in Figure 3.14. The shaded area denotes the likelihood of information loss. The consumer obtains a benefit u( Q) from a transmission of size Q, where the benefit function is increasing in transmission size. If the size of the transmission were to be reduced due to the network's capacity constraint, the consumer would suffer two effects. First, there would be a loss of incremental benefit since some of the transmission did not reach its destination. Second, the consumer would experience a cost of information loss. Let g be the cost of information loss per unit of reduced transmission. Therefore, if h K, the consumer's expected utility is U(h, = Networks in Telecommunications f(Q)/F(h) Figure 3.14. The probability of information loss when network capacity Krepresents band- width and f(Q) is the density of data transmissions defined over the range from zero to h. If h > K, the consumer's expected utility is Even if the consumer has free access to capacity up to the available bandwidth K, the consumer may still choose to bear some information l