Low rate high latency data services will co-exist with high rate low latency real-time multimedia applications in the next generation networks. Increasing volume of multimedia flows in an environment with heterogeneity in bandwidth, propagation medium and statistical characteristics of traffic can be expected to generate time-varying demands on the quality of service (QoS) and network resources. In such non-stationary environment, dynamic resource reservation schemes operating in harmony with the variability in demand patterns may provide efficient mechanisms for resource utilization and guarantee QoS compliance. In this work we identify the challenges that need to be addressed in designing a three level core, distribution and edge (CDE) hierarchical network using time-varying resource allocation mechanisms. Learning, prediction and correction (LPC) architecture based upon integration of operational CDE network with online simulation proposed as a design alternative to contemporary networks. © 2006 by Springer Science+Business Media, LLC.