&RQWHQWV 3UHIDFH [L &RQWULEXWRUV[Y $FURQ\PVDQG$EEUHYLDWLRQV [YLL 3DUW, 7KH1HHGIRU$GYDQFHG6RIWZDUH7HFKQRORJLHVLQ 7HOHFRPPXQLFDWLRQ1HWZRUNV &KDSWHU 1HWZRUNVDQG7HOHFRPPXQLFDWLRQV6RIWZDUH(YROXWLRQ E\*0DPDLV$3DSDGDNLV03HUGLNHDV,9HQLHULV ,QWURGXFWLRQ $8QLI\LQJ3HUVSHFWLYHRI1HWZRUNLQJ7HFKQRORJLHV 7HOHFRPPXQLFDWLRQ1HWZRUNV7HFKQRORJLHV +LVWRULFDOHYROXWLRQRIWHOHFRPPXQLFDWLRQVQHWZRUNV 7HOHFRPPXQLFDWLRQVVHUYLFHVVLJQDOLQJDQGPDQDJHPHQWHYROXWLRQ ,QWHUQHW6RIWZDUH7HFKQRORJLHV +LVWRU\RIWKH,QWHUQHW 7&3,3SURWRFROVXLWH (YROXWLRQRILQWHUSURFHVVFRPPXQLFDWLRQRQWKH,QWHUQHW :RUOG:LGH:HE 1HZWUHQGV 5HIHUHQFHV &KDSWHU )XWXUH7UHQGVLQ7HOHFRPPXQLFDWLRQV6RIWZDUH7HFKQRORJLHV E\)&KDW]LSDSDGRSRXORV03HUGLNHDV,9HQLHULV 6RIWZDUHLQ7HOHFRPPXQLFDWLRQ(QYLURQPHQWV 7KH5ROHRI6HUYLFHVLQ7HOHFRPPXQLFDWLRQV 7KH5ROHRI6HUYLFHVLQ&RPSXWHU1HWZRUNV 5HODWLYH3URVDQG&RQVRIWKH7HOHFRPPXQLFDWLRQ1HWZRUNV $SSURDFK +LVWRULFDO3UDFWLFHVWKDW8QGHUSLQQHG'LIIHUHQWLDWLRQ $Q$FDGHPLF3HUVSHFWLYH &RPSXWHU1HWZRUNV5HYLVHG 7HOHFRPPXQLFDWLRQV5HYLVHG )XWXUH7UHQGVDQG(QDEOLQJ7HFKQRORJLHV 5HIHUHQFHV 2EMHFW2ULHQWHG6RIWZDUH7HFKQRORJLHVLQ7HOHFRPPXQLFDWLRQV vi 3DUW,, (QDEOLQJ6RIWZDUH7HFKQRORJLHV &KDSWHU 2EMHFW2ULHQWHG'HVLJQ0HWKRGRORJLHV E\*0DPDLV03HUGLNHDV,9HQLHULV ,QWURGXFWLRQ *HQHUDO3ULQFLSOHVRI2EMHFW2ULHQWDWLRQ ,QWHUIDFHV ,QIRUPDWLRQKLGLQJ ,QKHULWDQFH 3RO\PRUSKLVP 2EMHFW2ULHQWHG0HWKRGRORJLHV 2EMHFW2ULHQWHG$SSURDFKHVLQ7HOHFRPPXQLFDWLRQV6RIWZDUH ,PSOHPHQWDWLRQRIWKHLQWHOOLJHQWQHWZRUNVHUYLFHVZLWFKLQJIXQFWLRQ ,PSOHPHQWDWLRQRIWKHLQWHOOLJHQWQHWZRUNVHUYLFHORJLFSURJUDPV 1HWZRUN0DQDJHPHQWDQG6HUYLFH(QJLQHHULQJ 7HOHFRPPXQLFDWLRQV0DQDJHPHQW1HWZRUN 7,1$ 5HIHUHQFHV &KDSWHU 'LVWULEXWHG2EMHFW7HFKQRORJ\ E\6&KR\*'H=HQ23\URYRODNLV *HQHUDO3ULQFLSOHV 'LVWULEXWHG2EMHFW$UFKLWHFWXUHV 2EMHFW0DQDJHPHQW*URXS$UFKLWHFWXUH 0LFURVRIWDUFKLWHFWXUH &RPSDULVRQRIDUFKLWHFWXUHV 'LVWULEXWHG2EMHFW7HFKQRORJ\LQ7HOHFRPPXQLFDWLRQV 1HWZRUN0DQDJHPHQW6\VWHPV ,QWHOOLJHQW1HWZRUNV 0RELOHZLUHOHVV1HWZRUNV 7HOHFRPPXQLFDWLRQV,QIRUPDWLRQ1HWZRUNLQJ$UFKLWHFWXUH 5HIHUHQFHV &KDSWHU 0DFKLQH,QGHSHQGHQW&RGH E\)&KDW]LSDSDGRSRXORV03HUGLNHDV,9HQLHULV ,QWURGXFWLRQ -DYD ,QWURGXFWLRQ 7KH-DYD9LUWXDO0DFKLQHDUFKLWHFWXUH 7KHFODVVORDGHU -DYDLQWHOHFRPPXQLFDWLRQSURWRFROV 6FULSWLQJ/DQJXDJHV 7KH6WDQGDUGIRU&RGLQJ0XOWLPHGLD3UHVHQWDWLRQV±0+(* 0+(* &RQWHQWV viviixxvix 7KHXVHUSUHVHQWDWLRQLQWHUIDFHPRGHO 7KHQHWZRUNPRGHO 7KHGHVFULSWLRQPRGHO 7KHFODVVKLHUDUFK\ +RZDQ0+(*HQJLQHZRUNV 5HIHUHQFHV &KDSWHU $JHQWV E\70DJHGDQ]03HUGLNHDV,9HQLHULV *HQHUDO3ULQFLSOHVRI6RIWZDUH$JHQWV 7RZDUGVDJHQWV±KRZLWDOOEHJXQ $JHQWGHILQLWLRQV $JHQW6WDQGDUGV )RXQGDWLRQIRULQWHOOLJHQWSK\VLFDODJHQWV $JHQWVWDQGDUGL]DWLRQZLWKLQWKH2EMHFW0DQDJHPHQW*URXS ,QWHJUDWLRQRI20*0$6,)DQG),3$FRQFHSWV 0RELOH$JHQW3ODWIRUPV &RPPRQPRELOHDJHQWSODWIRUPFRQFHSWVDQGFDSDELOLWLHV ,QWHJUDWLQJ0$7SODWIRUPVDQG'27SODWIRUPVIRUDSSOLFDWLRQV 0RELOH$JHQWVLQ7HOHFRPPXQLFDWLRQV 0DQDJHPHQWE\GHOHJDWLRQ±0$EDVHGQHWZRUNPDQDJHPHQW VHUYLFHV ,QWHOOLJHQFHRQGHPDQG±0$EDVHGLQWHOOLJHQWQHWZRUNVHUYLFHV $FWLYHQHWZRUNLQJ±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viii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ixx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àHQGWRHQGDUJXPHQWả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àFDUHIXO ILOH WUDQVIHUả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àFDUHIXOO\ảWUDQVIHUDILOHEHWZHHQWZR FRPSXWHUV $ DQG % OLQNHG ZLWK D GDWD FRPPXQLFDWLRQV QHWZRUN à&DUHIXOả DOOXGHV WR WKH UHTXLUHPHQWWKDWWKHHQJLQHHUVKRXOGQRWFRQWHQWKLPVHOIVLPSO\ZLWKDàEHVWHIIRUWảVHUYLFH EXWPXVWJXDUGDJDLQVWIDLOXUHVWKDWFDQRFFXUDWYDULRXVSRLQWVDORQJWKHZD\,WLVDVVXPHG WKDW WKH HQJLQHHU WDNHV QRWKLQJ IRU JUDQWHG DQG LV UHVSRQVLEOH IRU GHILQLQJ DQG LPSOHPHQWLQJORZHUOD\HUSURWRFROVLQDQ\ZD\KHVHHVILW )URP WKH ILOH WUDQVIHU SURJUDP¶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¶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àHQGWRHQG FKHFN DQG UHWU\ả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¶V UHDVRQLQJ LV DJDLQVW ORZ OHYHO IXQFWLRQ LPSOHPHQWDWLRQ DV LW DGYLVHVWKHQHWZRUNGHVLJQHUWRUHVLVWWKHWHPSWDWLRQWRàKHOSả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¶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¶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àPLGGOHả EHWZHHQ WKH RSHUDWLQJ VVWHP DQG WKH DSSOLFDWLRQV... IOH[LEOH RSHQ VHUYLFH SODWIRUPV $V PLGGOHZDUH WSLFDOO SURYLGHV RQO ORZHU OHYHO JHQHULF IXQFWLRQDOLWLHV DQRWKHU SUHUHTXLVLWH IRU DFKLHYLQJ WKH UDSLG DQG HIILFLHQW SURYLVLRQ