Online Video vs. ISPs: How Much is too Much?

One of the afternoon sessions at Streaming Media West, being held at the McEnery Convention Center in San Jose through Thursday, September 25, dealt with the topic of ISP caps on online video. Titled "Online Video vs ISPs: How Much Is Too Much?" the panel was hosted by Chris Albrecht a writer with NewTeeVee. Presenters included representatives from AT&T, Verizon, and Level 3.

"Three years ago weren't carrying video traffic," said Sam Farraj of AT&T. "Today, of the 15 petabytes of traffic we carry, over 40% of it is video traffic. We see a compelling need to bring together WAN and LAN capabilities, leveraging the strengths of behind-the-firewall delivery, such as better quality videos and longer sessions, with places that a CDN is more efficient.."

When Albrecht presented a question about caps, the response was surprising.

"TV is effectively an on-demand medium, pre-programmed well ahead of time to avoid peaks and spikes," said Doug Pasko, senior technologist, Verizon. "Moving the concept to the web is quite a bit different. The ISP wants to work with over-the-top video providers, really wants to work with them, to give customers what they're demanding—compelling content—so come sit down and let's have a discussion."

"The innovation question ties tightly with caps," said John Furrier, VP, U.S. op erations, PPLive. "Innovation really comes down to bandwidth—startups can best innovate when bandwidth is cheap (think early YouTube) but also need to be willing to pay as their success grows."

"We believe in technology," joked Lisa Guillaume, VP, CDN services, content markets, Level 3 Communications, about Level 3's neutral stance. "Advancements help build better economic models and we see that Adobe, Microsoft, and Move, all of whom we work with, are great in designing players for what we're currently challenged with. Another area of investment from Level 3's standpoint is how we make it more effective for our ISP customers to get content less expensively. For large, peaky content, we've been working with ISPs to do Ethernet Layer 2 'express routes' to minimize large routing costs. Not exciting, but very effective."

"From a content owner's perspective, we believe in bringing it full circle," said Farraj. "What Comcast—or others—are trying to accomplish is to get a very small group of users to pay for delivery. Some want to stamp P2P out, others want it to use it to drive innovation."

"Use a hybrid approach," agreed Verizon's Pasko. "Tie P2P in with CDN delivery, since it works for popular content but not for long tail. If you walk around with a P2P hammer, everything looks like a nail."

The moderator then asked about the biggest pain points for delivering to content providers and ISPs.

"It really depends on how you define a content provider," said AT&T's Farraj. "We're seeing traction in bundled delivery of content in the enterprise, with computer screens being within the firewall, while outside the firewall customers and employees also need access to the content on a mobile device."

"The question is how to deal with the peaks?" asked Level 3's Guillaume. "CDNs have provided the delivery solutions for content providers, but for our ISP customers, we see three issues: interconnects to other ISPs (transit, peering) is about 5% of their cost; building out national backbone at 20% of cost; and local and metro network buildouts (fiber, wireless, etc) at about 75% of cost. Those local networks were designed for oversubscription, so that's what brings us to the pain point of discussion we're at today."

"Multi-screen environments are still not trivial at all," added Verizon's Pasko. "Once that's solved, customers can do what they want to do—take it anywhere. The online world has really struggled to get to the television, since the end user buys a really high end home theater and wants to watch online-only content across the room. "

"Will no caps come around and bite someone like Verizon?" challenged Allbrecht.

"We'll never say never to caps," said Pasko, "but we don't want to penalize the power user as much as incentivizing a grandmother for not using quite as much bandwidth. Transparency is absolutely necessary—and all ISPs should be transparent with users if they're going to throttle."