As consumers enjoy new streaming media services from the Internet, network providers are being left with the bill for managing the traffic load that is growing at an explosive rate. For network providers, increasing the network capacity will be necessary, but it is often misleading to think that capacity increase alone can help deliver these new services cost effectively. Internet video and online gaming services can create revenue opportunities, but quality of service (QoS) assurance becomes an important requirement for offering these services with a service level agreement (SLA) commitment to both business partners and residential subscribers. In this paper, we first explain the network optimization challenges faced in the aggregation network related to the Internet-based service delivery scenarios, and then we describe our traffic model that quantitatively demonstrates the value of implementing dynamic QoS and deep packet inspection to enable new service offers and reduce capital expenditure in network capacity expansion. © 2011 Alcatel-Lucent.