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The queues are still there, but scheduling ensures that they don't fill up.

Incorrect. The scheduling only ensures that the queues in the network (from the NIC onwards) don't fill up. However, there queues are still there in the host and in the arbiter. The authors never measure or demonstrate that these queues are any shorter, that the tail latencies are improved for any real workload, or that there is any actual benefit in the approach for a real world scenario.

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