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In recent years application-level networking (e.g. overlay networks, P2P networks) has become key enabling architecture for supporting distributed services on the Internet. We consider overlays to have delay and cost requirements and thus there exists an optimal distribution of the overlay traffic (the service engineering problem) across multi-domain underlay networks such that these requirements can be satisfied while achieving fairness among the overlays. To this end, we formulate the problem as a convex optimization problem and propose a distributed solution. We show the efficiency and effectiveness of our approach through simulation studies.