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Telcos urged to innovate data tariffs to counter OTT threat

24 Nov

At LTE North America in Dallas this week, a panel featuring Wireless 2020, IBM, Allot Communications and US-based MVNO FreedomPop urged the service provider community to develop more flexible and tailored data bundles for customers.

During a discussion focused on future revenue generation opportunities, conversation moved towards the current landscape which is seeing telcos lose ground to over the top content providers. Ken Jackson from IBM Now Factory believes that moving to specific and tailored, content-based services is a feasible opportunity for operators to monetise services in new ways.

“Let’s look at the example of a service called NFL Now, a friend of mine can watch as much NFL as he wants, and doesn’t pay for the data he uses, he pays to watch football,” he said. “We have to return the value proposition to the customer, find out what it is they want to do, and offer it to them. Make everything customer centric, and orchestrate your business around what they need”

Haig Sarkissian from Wireless 2020 concurred with Jackson, and urged the service provider community to move away from basic all-you-can-eat data plans.

“5% of the heaviest users consume 40-50% of the network, and they pay the same as the majority,” he said. “That’s why unlimited data plans are unfair, because the majority are subsidising the data usage of the minority. Operators find that this is no longer scalable because if you eat more you have to invest more into capacity. I don’t see it changing any time in the future, unless there’s a fair way of using these “dumb pipe” plans. Is there hope for SP differentiation outside of these unlimited data plans?”

Allot Communications’ John Priest said service delivery is becoming far more personalised and tailored than in the past, suggesting operators should have a think about how they allow users to access the information and the content they want.

“I think we need things like VAS for the customer to make them feel in control of what they need. It’s not just the volume, it’s about the content they want and delivering that to them. Users want to know what they’re consuming, so the SP has to know what they’re consuming and how they’re consuming it, so that you can be more proactive in the customer care and guarantee a higher quality of service.”

“But here are a couple of examples of opportunities for SPs to generate revenue aside from traditional voice and data pricing models. Sponsored data solutions, for example, sees the user get free data if they’re going to certain sites, which is a partnership between the SP and the content provider. Similarly to music streaming services, SPs can strike up a partnership with advertisers.”

US MVNO FreedomPop’s Mauricio Sastre suggested there are opportunities for partnerships between carriers, app developers and content providers, help users consume new applications for reduced costs, or for free.

“In an effort to get their app out there, the app developers are considering paying for the data that their app consumes, so there can be a subsidised way for users to consume their application.”

Of course, when debating content services over service provider networks, we naturally reach the inevitable pain point of net neutrality, Wireless 2020’s Sarkissian rounded of the discussion on such a note.

“When do we get into the net neutrality debate, the big elephant in the room? Do you decide to charge more for content from Netflix, or NFL Now, or WebRTC services?” he said. “In my opinion, any resource that’s finite, and has the potential to be fully consumed, should be left alone from regulation. Otherwise you jeopardise the investment into, and the competition of, all of these services.”


Mobile Net Neutrality – Exploiting the Grey Areas

3 Jul

There is no one definition of Net Neutrality. It is a concept rather than a technical or legal definition. It is not even clear in many eyes whether it applies to all networks (no) or just the Public Internet (yes) – and what happens where they both share infrastructure such as broadband access (err… good question). 

Certain things are definitely “not neutral” under any definition, such as deliberate degradation or outright blocking of legal Internet content or applications, on otherwise uncongested networks. Conversely, other aspects such as capped data plans, the use of CDNs or protections against denial-of-service attacks are viewed as completely acceptable, by all but the most hardcore “activists”. 

Much of the current furore is around the prospect of paid-priority “fast lanes”, otherwise known euphemistically as “specialised services”, and whether they force other non-partnered traffic onto unusable “slow lanes”. This also tends to draw distinctions between fixed and mobile data broadband, because the former already have dedicated QoS-managed pathways for carrier VoIP and IPTV, while mobile broadband generally does not, except for a few tough-to-implement VoLTE instances. 

Given this blog’s focus, the main emphasis here is on mobile data models rather than fixed broadband.

The vagaries of mobile networks such as interference, mobility, devices & coverage, and the fact that most traffic to smartphones goes via 3rd-party WiFi anyway, tend to make discussion of general 4G paid-QoS mostly irrelevant. You can also add in the lack of any obvious willingness of market participants to pay for “unprovable but slightly better than average QoS, honest” and the ever-better capability of most software to deal with occasional network variability and glitches.

Some market participants try to steer discussion towards totally irrelevant topics, such as paid peering arrangements, or “discrimination” by Apple or Google in their app-stores or access to OS APIs – usually to try to create strawman arguments about their own preferred stance on real Net Neutrality. While both might be examples of “unfairness” in an abstract sense, they are completely decoupled from broadband access to the Internet or other services.

Such “red herrings” are simply used to deflect the Neutrality discussion. But a more interesting set of developments can be considered “grey areas”. Many mobile operators are trying to nibble around the edges of Net Neutrality – partly to see how far they can push regulators’ boundaries, but also in an effort to differentiate their broadband propositions. They are testing the waters with approaches such as:

  • User-defined prioritisation, where the customer rather than telco defines their own Internet connection’s “non-neutrality”, or chooses ISP-managed offers like “gamer broadband”, or various child-protection content-filtering options.
  • Various “worse-efforts” concepts, where “unimportant” traffic can be delayed until, or sent pre-emptively during, network quiet periods.
  • Zero-rating of certain content types, i.e. exempting specific data from users’ quotas. (I posted a detailed post here a few weeks ago). In this scenario, nobody pays per-MB for the data, although there may be revenue-share or other partnership models involved.
  • Sponsored-data / “sender-pays” models, such as that proposed by AT&T, where (in theory) 3rd-party application or content firms pay to offset users’ traffic consumption. I wrote a fairly scathing post here
  • Application-based charging, for example a flat-rate per day for using Facebook or Whatsapp.
  • User-based prioritisation, where certain customers (eg business users) receive better speeds or QoS than other users. While this does not explicitly differentiate between applications or content, in most instances businesses don’t watch Netflix, and consumers don’t use SAP.
  • Differential treatment or pricing of data that goes via proxy-based platforms (eg Opera Mini, BlackBerry) rather than direct to the Internet
  • M2M services managed differently to their consumer-centric data plaforms
  • Dedicated MVNO-type deals, such as those used by Amazon with its early Kindles, which look similar to “sponsored data” models. 

It can be seen that most of these “grey areas” involve differential pricing, rather than more “invasive” network-based QoS and prioritisation. Such approaches are easier both technically and in discussions with regulators. They also allow the operators’ marketing teams to work (fairly) swiftly to construct plans and deals, without getting mired in the cumbersome technical and organisational realities of network operations.

Two of the most high-profile approaches to “Grey Neutrality” are the zero-rating and sponsored-data approaches. AT&T’s January announcement of its Sponsored Data API programme has been a catalyst, and also in the US recently, T-Mobile has launched its “Music Freedom” plan as well as zero-rating speed-test data. 

Orange zero-rates traffic to its personal cloud service for consumers, Telia zero-rates Spotify and DT zero-rates its German mobile TV service. Of course, many other internal operator services such as MMS or closed-garden portals have long been available without incurring extra data usage costs, while BlackBerry plans have often been subscription-based rather than per-MB.  

Numerous emerging-markets operators have free offers to access Facebook/Twitter/Wikipedia/Whatsapp/Viber and numerous other services, including some giving free access to educational materials – although often this is in countries which don’t have Neutrality legislation anyway.

To be fair, the original vision for mobile data services was that they would be “on net” and billed in various modes, rather than volume-based Internet access. To a large extent, “raw” Internet access was only offered on mobile after most of the other 3G service models failed to gain any traction.

It is therefore unsurprising to see operators look to go back to the model of bundled or separately-billed services – although the main question is how this fits with the app-download paradigm, which normally implies a need for “vanilla” Internet access rather than hooks into a telco-resident server.

While the lawyers and lobbyists continue to argue over “fast lanes” in a black-and-white fashion, Disruptive Analysis believes that these tend to miss the point anyway, at least in mobile. There are only a few realistic use-cases for such QoS-optimised propositions, and they are unlikely to ever contribute more than a couple of percentage points to total mobile broadband revenues.

The action is going to be in the “grey areas”. Disruptive Analysis new report predicts over 1.5bn users of zero-rating by 2019, for example. In the sponsored data realm, the most promising category is in advertising, where it seems relatively non-controversial (and consumer-friendly) for unsolicited promotional content to be paid for by a third party, rather than consuming the user’s quota. 

There may be a few other “grey areas” emerging as well – expect interesting variants to emerge as SDN/NFV takes hold over the next 5 years – perhaps with CDNs or caching to be pushed down to the radio network. This will enable many services to be delivered “not directly from the Internet”, although whether the APIs are available to mainstream mobile app developers is questionable.  New forms of MVNO may emerge, as well as capabilities delivered via private cellular networks, WiFi or via telcos’ API platforms.

Regulators and others will find these challenging to deal with, so need to ensure that rules are framed flexibly and clearly.

In any case – they key thing for Net Neutrality isn’t the fireworks at the FCC or in Brussels. It’s the smaller instances of edging closer to the rules’ limits, especially around charging. Conversely, we should expect a lot more push-back and unintended consequences, where operators try to unilaterally block or degrade mainstream web services. We already see Netflix “outing” Verizon’s perceived/alleged games – that type of naming & shaming (and perhaps lawsuits) will be much more common, as well encryption and obfuscation.




FCC to probe Netflix’s battle vs. Internet providers

15 Jun


 The Federal Communications Commission has begun reviewing who’s at fault in Netflix’s video streaming battle with Internet service providers, an indication that the issue may be subject to broader regulatory oversight as the agency recasts new net neutrality rules.

Comcast, Netflix and Verizon Communications have agreed to the FCC’s review, and the agency will ask other companies, the agency said.

Netflix recently struck deals to pay Comcast and Verizon to connect its servers directly with the Internet providers’ networks to improve steaming speeds. Netflix has said it signed the deals reluctantly.

Earlier this month, Netflix also began issuing messages directly to some Verizon customers on its buffering screen, shortly before the movie starts, saying that Verizon’s crowded networks are to blame for slow streaming speeds. Verizon responded with a cease-and-desist letter, and Netflix agreed to pull the message.

“We don’t know the answers, and we are not suggesting that any company is at fault,” FCC Chairman Tom Wheeler said in a statement Friday. “The bottom line is that consumers need to understand what is occurring when the Internet service they’ve paid for does not adequately deliver the content they desire.”

“I have experienced these problems myself and know how exasperating it can be,” he said. “What we are doing right now is collecting information, not regulating. We are looking under the hood.”

The FCC has been receiving comments and consumer feedback as it takes steps to adopt new net neutrality, or Open Internet, rules that will mandate Internet providers to refrain from discriminating against various types of legal content by blocking it or lowering transmission speeds.

Q&A: Net neutrality — what is at stake?

DEBATE: John Oliver hammers FCC on net neutrality

Wheeler highlighted a consumer e-mail that he said summarizes general confusion over Netflix’s kerfuffle with Verizon about its on-screen message. The e-mail read: “Is Verizon abusing Net Neutrality and causing Netflix picture quality to be degraded by ‘throttling’ transmission speeds? Who is at fault here? The consumer is the one suffering! What can you do?”

In a statement, Netflix said it “welcome(s) the FCC’s efforts to bring more transparency.”

Consumer advocacy groups applauded Wheeler’s move and said the financial agreements between Netflix and Internet providers have not been clearly explained.

“The truth of the matter is that anyone not directly involved with a specific agreement has no way to know if the agreement represents a reasonable agreement between the parties or a degradation of the open Internet,” said Michael Weinberg, vice president of consumer technology advocacy group Public Knowledge.

In formulating net neutrality rules, the FCC has focused on the Internet pipes between the broadband provider and consumers’ homes, which is often called “the last mile.” But content distributors rely on other networks to move their video or audio files way before they reach the last mile. They send their content to third-party distributors, which then deliver it to Internet providers’ networks.

Netflix has relied on such agreements for years. In recent months, Netflix sought to lessen its dependence on third-party distributors by urging cable companies to let Netflix’s servers be placed directly in their networks. Several cable companies, including Cablevision and Cox Communications, agreed to do it for free. Comcast and Verizon refused until Netflix agreed to pay for it.

“Internet traffic exchange has always been handled through commercial agreements,” said Verizon spokesman Bob Elek. “This has worked well for the Internet ecosystem and consumers. We are hopeful that policymakers will recognize this fact.”


Broadband and Energy: Convergence 3.0

1 Jun

Vivint panel in home

We are in Convergence 3.0.  Convergence 1.0 occurred in the 1990s when telecommunications companies wanted to compete with long distance carriers; long distance carriers wanted to be local phone companies; and cable companies wanted to provide voice services.

In Convergence 2.0 we found cable companies, wireless phone companies, and traditional phone companies competing with hardware creators such as Apple; search engines, such as Google and Yahoo; and social media platforms, such as Facebook, LinkedIn, and Twitter, to become a higher form of media company, competing for eyeballs by owning and developing content that can be easily seen on their devices and connected to by their networks.

In this Bloomberg Businessweek article it appears that Convergence 3.0 is here.  Google and AT&T are providing services beyond the electric companies’ meters, services that promote the “Internet of Things” where not only can you turn on your lights with your smartphone, but you can use broadband connectivity as part of net metering services that allow consumers to monitor their energy conservation efforts and sell excess energy that they generate at home back to the utilities.

Consider this quote from the article:

“ ‘The battleground over the next five years in electricity will be at the house,” says David Crane, CEO of NRG Energy (NRG), whose company has made large investments in solar and is facing off against established utilities. “When we think of who our competitors or partners will be, it will be the Googles, Comcasts, AT&Ts who are already inside the meter. We aren’t worried about the utilities, because they have no clue how to get beyond the meter, to be inside the house.” Collaborating with Comcast, Crane’s NRG is running a trial in Pennsylvania that adds electricity to the traditional cable, phone, and Internet triple-play package.”

In addition, also from the article, here is an example of how broadband is used to monitor energy conservation:

Vivint’s business plan exploits the company’s large home-security customer base—800,000 homes across six states and the District of Columbia—to lease rooftop solar arrays. Vivint, which was bought by private equity giant Blackstone Group(BX) in 2012 for $2 billion, installs the solar equipment for free. Customers sign contracts to buy the power their systems generate at rates as much as 30 percent lower than the local utility. In just two years, Vivint’s solar unit accounts for 9 percent of all new rooftop solar installs in the U.S.

Because its customers are still hooked up to the grid, Vivint is able to sell any excess power back to the utilities under state-mandated net metering programs. Vivint and others are also learning how to deploy smart technology that can consolidate energy savings from millions of homes and businesses. Vivint offers a security system that incorporates computerized energy-conserving features—including the ability to set thermostats and control appliances. Utilities can contract with home-automation companies like Vivint to get their customers to defer the use of big appliances or turn down their air conditioning units during peak periods, helping utilities avoid power outages or the need to buy power on the spot market to make up for shortages. Consumers like it because they get paid for saving energy.

You have to ask yourself if we will also see a convergence of regulators and if there is a convergence of regulation, how will this impact capital flow and investment.  The net metering and the associated rates and credits affiliated with the program are regulated by state utility commissions.

Meanwhile, the Federal Communications Commission issued proposed net neutrality rules for the alleged purpose of ensuring that consumers can access the content of their choice at whatever points of the combined 66,000 networks we call the Internet.  These rules are also intended to ensure that app developers can deploy their services without fear of discrimination.

What happens if an electric utility says to a company like Vivint or to a consumer that they can’t use a certain application for accessing their network?  Can the FCC construct an argument under current statute that says the utility is discriminating against the consumer’s choice of application used on its network, thus a net neutrality violation?  And there is the more fundamental question of whether an electric utility is a broadband provider simply because it deploys smart grid technology within its network and allows connectivity with other wireless networks?

If the FCC were to wade into these waters, its strongest regulatory scheme would be section 706 versus Title II.  An electric utility could make a very strong argument that its not a telecommunications company and that Title II shouldn’t apply to it.  Smart grid and net metering are arguably advanced communications technology where computers are talking to and exchange information with each other about a consumer’s energy usage and under section 706 the FCC could make the argument that an electric utility’s prohibition of an application’s use on its network goes against the goal of deploying advanced communications.

Codifying section 706 in rule format may only serve to restrict the FCC even if it wanted to make an exception for electric utilities and avoid the headaches of dealing with over 50 state regulatory boards.

Regulatory arbitrage in the broadband age.  Something to think about.


Stuck in (Net) Neutral(ity) Part 2

26 May

This post picks up where the last post left off, so take the time to read Stuck in Net Neutral(ity) if you’ve not already done so.  And it bears worth repeating: this post is NOT about net neutrality.  I’m hoping that opening declaration serves as a bit of a moat, as from what I’ve seen in the past few weeks ANY point of view on net neutrality is met with serious vitriol.  I don’t need contempt in general, ESPECIALLY over something that I do for free.  So while I stand by my many requests for comments (and really people, you’re coming up short in that department) head elsewhere if you’re going to flame me.  Not only isn’t this post about net neutrality, it isn’t about the First Amendment.

In the earlier post, I outlined the vital function of content delivery networks (CDNs) and the fact that Netflix has built their own mother of all CDNs.  The inner workings are closely held, but it is reasonable to expect that the local “caches” hold the most watched 100,000 movies and shows.  That may sound like a lot, but run the numbers and you’ll see the NAS required isn’t terribly expensive.  Indeed, the caches may brute-force duplicate the entire Netflix library.  (Yes, spinning media still works like magic in many applications and wont’ be completely replaced by solid-state storage anytime soon.)

“OK then,” you’re thinking, “Netlfix has their massive video library replicated N times across the United States, with local copies located near all major population centers.  Netflix are home free.”  Those quaint last four words are where you would be dreadfully wrong.  In fact, the entire Netflix-Comcast feud comes down to just three words: Netflix, home, free.

Netflix believe that broadband providers like Comcast should deliver videos from the Netflix CDN to your home for free.  Netflix, home, free; CHECK.

Comcast believe that Netflix has lost its marbles if they think that gaining unfettered access and hovering up fully one-third of their broadband network delivering videos to your home should be free.  Netflix, home, free; CHECK.

Reed Hastings is SCREAMING that all packets are created equal: instant messaging packets, email packets, streaming audio packets and streaming video packets.  All the same.  The Netflix CDN brings their video packets to the metaphorical doorstep of the Comcast broadband network, and it is Comcast’s responsibility to deliver those packets to your home.  Rain, sleet, snow, one-third of their bandwidth be damned.  Netflix dropped serious coin building that CDN and they should NOT have to pay a penny to Comcast or any other ISP to get all those video packets delivered to your house.

You will no doubt be shocked to learn that Comcast doesn’t see it that way.  Despite being the second-lowest rated North American company on customer satisfaction (ever so slightly above Time Warner Cable), Comcast HAS built an impressive broadband network.  And it cost a MINT to build that capacity: those umpteen thousands of miles of coax they laid down were never intended to move bits, it was intended to move analog … in ONE direction, mind you, TO your house.  They’ve re-tooled that cable plant—the little boxes on your street, the bigger boxes in your neighborhood, their distribution centers, pretty much everything EXCEPT the coax—to handle bi-directional digital traffic and deliver up to 100 Mbps Internet PLUS a ton of digital video to your house.

Modest digression.  Those of you with really good memories may recall that the very first cable modems used ANALOG RETURN.  Yup, upstream traffic was sent via analog modem, as cable plant of the time was incapable of sending data in the ‘wrong’ direction.  The term “cable plant” is rarely used today, because [a] using it dates you and [b] a tremendous portion of the network is fiber optic rather than coax cable.

Having spent all that money building a solid broadband network, Brian Roberts wakes up one day and discovers that one-third of his traffic comes from one source: Netflix.  If he were a generous and charitable type, Brian would write another giant check, increase the bandwidth available on his backbone and all of us would thank Brian for being so devoted to net neutrality.  Guess what?  My Netflix would still freeze a couple of times an hour.  Because the problem is NOT a shortage of bandwidth on the Comcast broadband network.

“Hold on there From Silicon Valley dude,” you’re wondering, “if Comcast has enough bandwidth and my video still stalls, then they MUST be de-prioritizing Netflix traffic.  So this IS all about net neutrality after all!”  I stated clearly that both parts of this post are NOT about net neutrality, so OBVIOUSLY I am not about to pull a 180.  However, it is perfectly fair to ask: if Comcast has the bandwidth and all packets flow in the same manner—but our videos still freeze—what is the problem?

The problem is in the tubes; well to be more precise, the problem is the connection BETWEEN the tubes.  (Or “pipes” as everyone that isn’t named Senator Ted Stevens would say.)  As noted above: Netflix has dropped serious coin on their mother of all CDNs, effectively constructing REALLY fat pipes to all major population centers; Comcast has built a broadband network that impresses ME (someone not easily impressed by ISPs) with its own set of fat pipes.  The entire issue is the CONNECTIONS between the fabulously capable pipes owned by Netflix and the tremendously impressive pipes owned by Comcast.

Think of it this way: Netflix drops a massive video library/server in your town.  How does that Netflix server route those video packets to your home?  Over a public internet backbone and then on to Comcast’s broadband network? Absolutely NOT: that would add hops, which you will recall is every bit as bad as crossing the beams.  To say nothing of the fact that the public internet backbone would come to a screeching halt under the weight of all that traffic.  This is why we invented CDNs in the first place.

The solution is the answer to the age-old question “what is the shortest distance between two points?”  No, no, “let me check Google Maps” is most certainly NOT the answer.  The shortest distance is a straight line and FINALLY getting to the crux of the matter: connect the Netflix CDN DIRECTLY to the Comcast backbone.  As Inspector Clouseau would say, “Voilà!  The problem, she is solve-ed!”  Believe it or not, Netflix and Comcast agree on this, which is good, because it is the completely logical solution.

But not so good, because Netflix feels QUITE strongly that they should get this direct connection at no charge, while Comcast—wacky capitalists that they are—think that such a high-value-high-bandwidth connection has, well, VALUE that Netflix should pay for.  And THAT is the source of the feud.

Lest you think any of this would be easy to explain, it gets harder to explain.  Netflix convinced many smaller ISPs that a direct connection to their backbones was good for the ISP’s customers and hence should be provided to Netflix free of charge.  The larger ISPs like Comcast had the (pardon the pun, but I simply must) BACKBONE to tell Netflix “you want the high-value-high-bandwidth connection, you’re going to pay for it.”  And travel with me now through the looking glass: Netflix agreed and paid Comcast.

Inspector Clouseau nailed it: as soon the Netflix CDN was connected directly to the Comcast backbone, customer complaints about stalled/frozen videos plummeted.

I’ll refrain from quoting YOU and what you’re thinking, but I would actually like to know what you’re thinking at the end of this paragraph.  It was AFTER he wrote the check to Comcast that Reed Hastings went on the bender of all Twitter-and-then-some whistle stop tours telling EVERYONE that Comcast was ripping up net neutrality, destroying the Internet and—while they didn’t actually have the photo—that Brian Roberts flipped off the FCC.  Seriously, I can’t make stuff like this up even when I try.

One last factoid and then we’ll hand this to the jury.  Gross oversimplification here, but the analogy works:

  • Imagine that there is a single router sitting between the public Internet and the Comcast broadband network
  • The Netflix CDN is now connected directly to the Comcast backbone
  • Therefore, Netflix video packets no longer ‘compete’ with all other packets at that router; they do an end-run around that potential bottleneck
  • Now that Netflix packets have nearly unfettered access to the Comcast backbone, they hoover up all the bandwidth they need; THAT IS HOW AND WHY videos no longer freeze
  • Given that nobody added bandwidth to the Comcast broadband network, other traffic MUST be slower than it was pre-Netflix-Comcast-direct-connection

Call me cynical, but THAT doesn’t sound like a shining model of net neutrality.  That sounds like Netflix packets are getting preferential treatment at the expense of other packets.  THAT sounds like Reed Hastings should put a cork in the “Comcast is undermining net neutrality” bandwagon.  From Silicon Valley.


Here is Level 3′s plan to make interconnection fees a network neutrality issue

23 Mar
Data Cables Peering

Should ISPs be able to charge transit providers and web content companies for access to their end users? Are they actually doing this? The FCC may have to decide.

The gloves are coming off in the fight to prevent ISPs from charging content providers and middle mile transit companies a fee to deliver web content to the end consumer. Earlier this week Level 3 Communications, a transit provider wrote a post that claimed interconnection fees should be a network neutrality issue and then on Thursday Netflix CEO Reed Hastings posted a blog post and submitted a filing to the FCC that said the same thing.

On Friday Level 3 filed its formal comments to the agency, and both give examples of what they see as ISPs trying to collect tolls in the middle of the network.

This is the problem

One way ISPs  justify their interconnection fees is to point out that they will exchange traffic for free — so long as it is between “peers” or networks of equal size. They use traffic ratios to determine this and publish those rations online or in a publicly available database. However, Hastings said in this blog post that when Netflix suggested that it could become a peer to ISPs by making the upstream and downstream traffic burden it was imposing equal (and thus meeting the direct peering definition), “there is an uncomfortable silence.”

Meanwhile, Level 3′s filing claims that the company sought to peer with an ISP and was rebuffed even though it had offered to split the cost of connecting the two networks by paying for more ports and servers. It then showed two charts that illustrate how the single port it had with this unnamed ISP became congested at the same time every week as the ISP’s end users demanded more content.

Level 3 and Netflix argue that these are tolls placed by the ISP, which restrict the content providers’ ability to get their traffic to the end user. They argue that this is the same as discrimination on the last mile network, even though it is happening further upstream where the middle mile meets the last mile.

A solution for peering disputes?

So Level 3 has proposed that the FCC should require ISPs to interconnect on “commercially reasonable terms, without the payment of an access charge.”
Level 3 wants the FCC to say that access charges, where an ISP charges those it exchanges traffic with for the privilege of reaching its users, are not commercially reasonable. It then suggests some basics on how the FCC should think about “commercially reasonable terms.”

Basically, Level 3 wants an ISP to add more capacity at congested areas at no charge or offer another point of interconnection in the geographic area where it will provide interconnection without charge. It’s unclear if Level 3′s definition of no charge, means that Level 3 won’t help offset the cost of the gear to provide more capacity.

As a way of mitigating the burden such rules would lay on ISPs, Level 3 suggests that ISPs would only have to interconnect with large networks. It also notes that the FCC could implement this rule without imposing common carrier rules on ISPs, which the agency is clearly unwilling to do.

Level 3 says in its filing:

This proposed rule would directly target the threat large, last-mile bottleneck ISPs pose to the free and open Internet when they attempt to leverage their control over access to their users to generate inefficient rents and harm their competitors. Yet the proposed policy would not prevent ISPs from offering services, such as transit services or CDN services, to those that wish to interconnect with them (whether edge providers or others), provided that they also offer interconnection on commercially reasonable terms as described above. The rule would simply prohibit ISPs from levying tolls for access to customers

Why now and will it work?

Today is the last day to file comments with the FCC on its decision to address network neutrality in the wake of a court decision that struck down most of the commission’s 2010 Open Internet Order that made network neutrality an actual rule in the first place. The courts agreed in principle that the FCC could ensure that ISPs didn’t discriminate on traffic going across their networks, but disagreed with how the FCC wrote the rules.

The agency is now trying to address this legal flub, and in doing so, seemingly opened the door to ensure that interconnection agreements between ISPs and internet content and transit providers are protected. But for consumers who are sick of a crappy online video experience, the question isn’t why this is happening now, but whether or not this is a strategy that will work.

And that’s uncertain. The problem of ISPs choking traffic to extract access charges is a real one, I’ve no doubt, but the FCC may not see it as a network neutrality issue. Itis an issue, and I think the current FCC Chairman Tom Wheeler understands the issue based on my interview with him in January, when he called it a “cousin” of network neutrality.

Harold Feld, an SVP at Public Knowledge, says it is an interconnection issue, one that should be addressed only when we have that data to understand what’s going on. I tend to agree that data will be essential here and hope the FCC asks for it.”If Wheeler wants to get [the data], he knows where to look,” said Feld, who pointed out that LEvel 3 and Cogent would be happy to give it up if pressed and that Comcast and Time Warner Cable could be compelled to do so as part of their merger process.

So the next question here isn’t about pushing network neutrality necessarily, but about getting the data to understand the problem.


How the internet works, and why it’s impossible to know what makes your Netflix slow

23 Mar

How the internet worked in the good old days. AP Photo/File, Paul Sakuma

The internet is a confusing place, and not just because of all the memes.

Right now, many of the people who make the internet run for you are arguing about how it should work. The deals they are working out and their attempts to influence government regulators will affect how fast your internet access is and how much you pay for it.

That fight came into better view last month when Netflix, the video streaming company, agreed to pay broadband giant Comcast to secure delivery of higher-quality video streams. Reed Hastings, the CEO of Netflix, complained yesterday about Comcast “extracting a toll,” while Comcast cast it as “an amicable, market-based solution.” You deserve a better idea of what they are talking about.

For most of us, the internet is what you’re looking at right now—what you see on your web browser. But the internet itself is comprised of the fiber optic cables, the servers, the proverbial series of tubes, all owned by the companies that built it. The content we access online is stored on servers and transmitted through networks owned by lots of different groups, but the magic of the internet protocol lets it all function as the integrated experience we know and, from time to time, love.

The last mile first

Start at the top: If you’ve heard about net neutrality—the idea that internet service providers, or ISPs, shouldn’t privilege one kind of content coming through your connection over another—you’re talking about “last mile” issues.


That’s where policymakers have focused their attention, in part because it’s easy to measure what kind of service an individual is getting from their ISP to see if it is discriminating against certain content. But things change, and a growing series of business relationships that come before the last mile might make the net neutrality debate obsolete: The internet problem slowing down your Netflix, video chat, downloading, or web-browsing might not be in the last mile. It might be the result of a dispute further up the line.

Or it might not. At the moment, there’s simply no way to know.

“These issues have always been bubbling and brewing and now we’re starting to realize that we need to know about what’s happening here,” April Glaser of the Electronic Frontier Foundation says. “Until we get some transparency into how companies peer, we don’t have a good portrait of the network neutrality debate.”

What the internet is

What happens before the last mile? Before internet traffic gets to your house, it goes through your ISP, which might be a local or regional network (a tier 2 ISP) or it might be an ISP with its own large-scale national or global network (a tier 1 ISP). There are also companies that are just large-scale networks, called backbones, which connect with other large businesses but don’t interact with retail customers.

All these different kinds of companies work together to make the internet, and at one point, they did so for free—or rather, for access to users. ISPs would share traffic, a process called settlement-free peering, to increase the reach of both networks. They were worked out informally by engineers—”over drinks at networking conferences,” says an anonymous former network engineer. In cases where networks weren’t peers, the smaller network would pay for access to the larger one, a process called paid peering.

For example: Time Warner Cable and Comcast, which started out as cable TV providers, relied on peering agreements with larger networks, like those managed by AT&T and Verizon or backbone providers like Cogent or Level 3, to give their customers what they paid for: access to the entire internet.

But now, as web traffic grows and it becomes cheaper to build speedy long-distance networks, those relationships have changed. Today, more money is changing hands. A company that wants to make money sending people data on the internet—Netflix, Google, or Amazon—takes up a lot more bandwidth than such content providers ever have before, and that is putting pressure on the peering system.

In the facilities where these networks actually connect, there’s a growing need for more ports, like the one below, to handle the growing traffic traveling among ISPs, backbones, and content providers.

A 10 gigabit ethernet port module built by Terabit Systems. Terabit Systems

But the question of who will pay to install these ports and manage the additional traffic is at the crux of this story.

How to be a bandwidth hog

There are three ways for companies like these to get their traffic out to the internet.

With cheaper fiber optic cables and servers, some of the largest companies simply build their own proprietary backbone networks, laying fiber optic wires on a national or global scale.

Google is one of these: It has its own peering policies for exchanging data with other large networks and ISPs, and because of this independence, its position on net neutrality has changed over the years. That’s also why you don’t hear as much about YouTube traffic disputes as you do about Netflix, even though the two services pushing out comparable quantities of data.

Or your company can pay for transit, which essentially means paying to use someone else’s backbone network to move your data around.

Those services manage the own peering relationships with major ISPs. Netflix, for instance, has paid the backbone company Level 3 to stream its movies around the country.

The final option is to build or use a content distribution network, or CDN. Data delivery speed is significantly determined by geographical proximity, so companies prefer to store their content near their customers at “nodes” in or near ISPs.

Amazon Web Services is, among other things, a big content distribution network. Hosting your website there, as many start-ups do, ensures that your data is available everywhere. You can also build your own CDN: Netflix, for instance, is working with ISPs to install its own servers on their networks to save money on transit and deliver content to its users more quickly.

Ready to be even more confused? Most big internet companies that don’t have their own backbones use several of these techniques—paying multiple transit companies, hiring CDNs and building their own. And many transit companies also offer their own CDN services.

Why you should care

These decisions affect the speed of your internet service, and how much you pay for it.

Let’s return to the question of who pays for the ports. In 2010, Comcast got into a dispute with Level 3, a backbone company that Netflix had paid for data transit—delivering its streaming movies to the big internet. As more people used the service, Comcast and Level 3 had to deal with more traffic than expected under their original agreement. More ports were needed, and from Comcast’s point of view, more money, too. The dispute was resolved last summer, and it resulted in one ofthe better press releases in history:

BROOMFIELD, Colo., July 16, 2013 – Level 3 and Comcast have resolved their prior interconnect dispute on mutually satisfactory terms. Details will not be released.

That’s typical of these arrangements, which are rarely announced publicly and often involve non-disclosure agreements. Verizon has a similar, on-going dispute with Cogent, another transit company. Verizon wants Cogent to pay up because it is sending so much traffic to Verizon’s network, a move Cogent’s CEO characterizes as practically extortionate. In the meantime, Netflix speeds are lagging on Verizon network—and critics say that’s because of brinksmanship around the negotiations.

What Netflix did last month was essentially cut out the middle-man: Comcast still felt that the amount of streaming video coming from Netflix’s transit providers exceeded their agreement, and rather than haggle with them about peering, it reportedly reached an agreement for Netflix to (reluctantly) pay for the infrastructure to plug directly into Comcast’s network. Since then, Comcast users have seen Netflix quality improve—and backbone providers have re-doubled their ire at ISPs.

Users versus content

You’ll hear people say that debates over transit and peering have nothing to do with net neutrality, and in a sense, they are right: Net neutrality is a last-mile issue. But at the same time, these middle-mile deals affect the consumer internet experience, which is why there is a good argument that the back room deals make net neutrality regulations obsolete—and why people like Netflix’s CEO are trying to define “strong net neutrality” to include peering decisions.

What we’re seeing is the growing power of ISPs. As long-haul networks get cheaper, access to users becomes more valuable, and creates more leverage over content providers, what you might call a “terminating access monopoly.” While the largest companies are simply building their own networks or making direct deals in the face of this asymmetry, there is worry that new services will not have the power to make those kinds of deals or build their own networks, leaving them disadvantaged compared to their older competitors and the ISP.

“Anyone can develop tools that became large disruptive services,” Sarah Morris, a tech policy counsel at the New America Foundation, says. “That’s the reason the internet has evolved the way it has, led to the growth of companies like Google and Netflix, and supported all sorts of interesting things like Wikipedia.”

The counter-argument is that the market works: If people want the services, they’ll demand their ISP carry them. The problem there is transparency: If customers don’t know where the conflict is before the last mile, they don’t know whom to blame. Right now, it’s largely impossible to tell whether your ISP, the content provider, or a third party out in the internet is slowing down a service. That’s why much of the policy debate around peering is focused on understanding it, not proposing ideas. Open internet advocates are hopeful that the FCC will be able to use its authority to publicly map networks and identify the cause of disputes.

The other part of that challenge, of course, is that most people don’t have much choice in their ISP, and if the proposed merger between the top two providers of wired broadband,Time Warner Cable and Comcast, goes through, they’ll have even less.


Neutered net-neutrality and Diameter signaling

17 Feb


Some parts of the media and concerned internet users are up in arms about the recent ruling on the FCC’s net-neutrality regulations, preventing the agency from ensuring that all web traffic is treated equally. Their concern is understandable. No one wants to be in a situation where service providers routinely throttle traffic based on commercial agreements or even political views. The nightmare scenario is that ISPs become de facto dictators of the internet and control the flow of information unimpeded.

However, if handled sensitively, there is a great opportunity for service providers to make use of policy enforcement and Diameter signalling management solutions to enhance the quality of service to users. There are always mobile consumers who would be very willing to pay for ensured quality as their communications are of premium value to them. Yet, although service quality is one thing, they are not interested in a service provider influencing the content that they view.

And their fears aren’t entirely unfounded, particularly when we look at how operators have treated OTT services in the past – throttling traffic that was competitive to their own offers. However we have seen, anecdotally at least, that service providers are starting to take another look at OTT services as potential partners; either to attract customers with bundled subscription deals (for example Spotify premium membership) or for revenue sharing deals. It’s this approach which I think is more indicative of which way service providers will fall on their treatment of net-neutrality.

Imagine, for example, that you frequently use mobile Skype video calls for work purposes. Unfortunately Skype calls do occasionally lose resolution or drop out altogether, which would be a terrible experience and loss for businesses and consumers that depend on it. For subscribers in this position it may be worth the extra expense to ensure that Skype data is treated differently to the rest of the data they use. Paying for assured quality of service (QoS) can make enormous sense for some services without deliberately hindering other data.

Paying for a premium service which guarantees a higher Quality of service according to a specific paid-for policy is made possible by a combination use of Diameter signalling controllers and policy enforcement.. In conjunction, they enable the network to identify the subscriber and level of policy, and ensure the subscriber receives the quality of service provisioned for. An approach like this is a compelling value proposition for subscribers and provides a strong business case for service providers while, at the same time, respecting the central principles of net-neutrality.

Net-neutrality is an important concept for a censorship free and open internet, but there is no reason that it cannot co-exist as a philosophy with the benefits that enhanced quality of service can provide.


All packets are not created equal: why DPI and policy vendors look at video encoding

10 Feb

As we are still contemplating the impact of last week’s US ruling on net neutrality, I thought I would attempt today to settle a question I often get in my workshops. Why is DPI insufficient when it comes to video policy enforcement?

Deep packet inspection platforms have evolved from a static rules-based filtering engine to a sophisticated enforcement point allowing packet and protocol classification, prioritization and shaping. Ubiquitous in enterprises and telco networks, they are the jack-of-all-trade of traffic management, allowing such a diverse set of use cases as policy enforcement, adult content filtering, lawful interception, QoS management, peer-to-peer throttling or interdiction, etc…
DPIs rely first on a robust classification engine. It snoops through data traffic and classifies each packet based on port, protocol, interface, origin, destination, etc… The more sophisticated engines go beyond layer 3 and are able to recognize classes of traffic using headers. This classification engine is sufficient for most traffic type inspection, from web browsing to email, from VoIP to video conferencing or peer-to-peer sharing.
The premise, here is that if you can recognize, classify, tag traffic accurately, then you can apply rules governing the delivery of this traffic, ranging from interdiction to authorization, with many variants of shaping in between.

DPI falls short in many cases when it comes to video streaming. Until 2008 or so, most video streaming was relying on specialized protocols such as RTSP. The classification was easy, as the videos were all encapsulated in a specific protocol, allowing instantiation and enforcement of rules in pretty straightforward manner. The emergence and predominance of HTTP based streaming video (progressive download, adaptive streaming and variants) has complicated the task for DPIs. The transport protocol remains the same as general web traffic, but the behaviour is quite different. As we have seen many times in this blog, video traffic must be measured in different manner from generic data traffic, if policy enforcement is to be implemented. All packets are not created equal.

  • The first challenge is to recognise that a packet is video. DPIs generally infer the nature of the HTTP packet based on its origin/destination. For instance, they can see that the traffic’s origin is YouTube, they can therefore assume that it is video. This is insufficient, not all YouTube traffic is video streaming (when you browse between pages, when you read or post comments, when you upload a video, when you like or dislike…). Applying video rules to browsing traffic or vice versa can have adverse consequences on the user experience.
  • The second challenge is policy enforcement. The main tool in DPI arsenal for traffic shaping is setting the delivery bit rate for a specific class of traffic. As we have seen, videos come in many definition (4k, HD, SD, QCIF…), many containers and many formats, resulting in a variety of different encoding bit rate. If you want to shape your video traffic, it is crucial that you know all these elements and the encoding bit rate, because if traffic is throttled below the encoding, rate, then the video stalls and buffers or times out. It is not reasonable to have a one-size-fits-all policy for video (unless it is to forbid usage). In order to extract the video-specific attributes of a session, you need to decode it, which requires in-line transcoding capabilities, even if you do not intend to modify that video.

Herein lies the difficulty. To implement intelligent, sophisticated traffic management rules today, you need to be able handle video. To handle video, you need to recognize it (not infer or assume), and measure it. To recognize and measure it, you need to decode it. This is one of the reasons why Allot bought Ortiva Wireless in 2012Procera partnered with Skyfire and ByteMobile upgraded their video inspection to full fledged DPI more recently. We will see more generic traffic management vendors (PCRF, PCEF, DPI…) partner and acquire video transcoding companies.


The Battle for Net Neutrality: How it Never Begun

3 Feb
The fear is real. People on wall street panicking as Netflix’s stock goes down 5% moments after the ruling came into effect; bloggers and journalists speculating what steps companies will take to gain back freedom on the net; lobbyists asking the government to circumvent the authority internet service providers (ISPs) will obtain; and now most recent news includes petitions—over a million of them—signed by furious protesters who want the FCC to reconsider repealing the rule on net neutrality. As companies such as Verizon, Comcast,  and AT&T stand to have the most to gain from the recent ruling, all advocates of net neutrality have fair reason to be concerned with how ISPs will be conducting business in the future given that they could gain (dare I say?) unlimited power over the internet. All the efforts spent by these protesters, however, won’t be necessary, since the absence of net neutrality might not be as apocalyptic as it may seem.

Of all the arguments for net neutrality, the following is the most prevalent in the blog/news community today: as stated in an article on, “If given free rein, these gatekeepers could determine which services get to drive through the pipes that make up the Internet at what speeds and prices.” This fear of giving these “gatekeepers” what appears to be full control of the internet is a scary thought; the fact that the fate of the entire internet world rest in the hands of only a few ISP giants, to give up full control without anyone to regulate what they’re doing and who they’re doing it to, to give up so much power in what is probably the greatest invention in human history to a bunch of money hungry, self-interested business men, is something most people aren’t completely comfortable with; I get it. I must say, however, there is one question no one has bothered to ask. If and when these dominant ISPs assume control of of any and all internet traffic—and for purposes of this argument I’m just going to say they will—are they really going to limit the speeds of the people that can’t afford to pay, and are they really going to start to censor and filter information on the internet away from those that have every right view that information? The diehard advocate for net neutrality most assuredly would agree, literally jumping at this question to proclaim, “Of course they are! Why else do they intend on putting speed limits on particular sites and businesses?” But before we dive into this topic of whether or not ISPs are going to commit to some sort of Nazi-esque ruling of the digital world, I would like to bring your attention to two of the most logical motives of why these ISP giants would like the control of the internet for themselves; and these are the reasons that all net neutrality advocates are concerned about:

1. Money $$$$$

2. Poltical Agenda

I’m going to start with number two, because it is the most easy to dismiss. Starting with no, ISPs have no political agenda. Find me a legitimate article of how ISPs are making any kind of remote attempt to rule the world, or perhaps even hold some kind of discrimination towards any particular group or community of people on the internet? Seriously, I’m going to wait here for someone to show me something by a legitimate and well-respected source in the industry so we can continue…

moving on.

Without a political agenda, ISPs have no motive to block any content on their networks. Although Comcast did induce a legal battle when caught interfering with the network speeds of BitTorrent users, it was a course of action that was far from political, and since then, both parties have recently set aside their differences by working together “to effectively manage traffic at peak times.” ISPs are a business like any other whose interest is motivated by means of acquiring money, a topic which brings me back to my previous point.

The question we should all be asking ourselves is: are they truly going to limit the speeds of the people that can’t pay? The answer is a resounding yes! And it’s actually a business model that makes perfect sense. Now before you get all bent over backwards about how it’s unfair to the little man or how it’s business malpractice. You have to understand that small businesses don’t need that kind of bandwidth to maintain their website, so it doesn’t matter one bit that they don’t get that “express lane” all the other big businesses will probably be getting, because they won’t be utilizing it. In the world of internet business, the amount of profit you make is directly correlated to the amount of traffic you get. It is the same reason why spamming websites exist, and the same reason why Youtube is paying people to make viral videos since the amount of views your page receives consistently represents your ever-growing internet presence, which translates to more money $$$$$.  Needless to say, popularity pays on the internet. But you know who’s not popular? Small businesses or start-ups. What’s the point of opening extra lanes on the road when you don’t even have enough traffic to fill the already existing roads to your website? In essence, the little man is not going to be affected by the absence of net neutrality, because the same service they’ve been getting for well over a decade will still be there. Now if ISPs begin to charge them for this service that everyone should receive by default, then that’s a problem. But they’re not going to because they’re going after the big money, namely, as of this moment, one of the hottest players on the internet, the one setting fire to much of the net neutrality debate, Netflix.


In the eyes of an ISP, the online film revolution of Netflix is a growing problem for them, because Netflix is the main source of their bandwidth woes. ISPs are investing money into their infrastructure to create larger, faster, and more open roads on the internet with the intentions of giving all their customers more freedom only to realize that Netflix seem to be hogging up one-third of it. Out of all the companies that run business online, if anyone should pay extra fees for bandwidth usage, it should be Netflix. Netflix’s customer base has grown an astronomical amount in the past 3 years; they can afford to pay the cost. The implementation of a multi-tiered system for quality internet service is the exact same concept for the customers they charge at home for personal use. If you feel like you don’t need to use or can’t afford an ISPs more expensive plan,  you don’t have to pay for the higher quality service, you can choose not to. That is a fine business model, and there’s nothing unethical about it. In fact, it is more than ethical; it is fair.

I’ll be honest, I’m not a business man, nor do I work for an ISP, nor am I a journalist that has the inside track to any news on the intents and purposes of what the major ISPs truly intend to do once they’ve been given the green light to manipulate all traffic across the internet. But I’m going to wager that ISPs are not going to go vigilante on people by haphazardly charging at whatever rate they see fit without any reason to do so. No, I believe in something a little more reasonable. They want to control the network and charge businesses more fees to those that can afford it, so they can build larger and faster networks in the future in hopes that even more businesses will grow large enough to take advantage of the increased bandwidth, then they can charge more businesses these fees in which they can also afford. Sure, it’s always about the money, but that doesn’t mean ISPs are evil by simply trying to take advantage of everyone for their own benefit and amusement. Yes, they’re making much more money than everyone else; but at least the internet will be a bigger and better place, because of what they’re trying to grow in the process.



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