February 27, 2014, 4:13 PM — The deal between Netflix and Comcast is something akin to building a private toll road: it is the beginning of a new kind of Internet, one where content will motivate more such plays. And coming so soon after the recent D.C. Court of Appeals ruling in the Verizon case on net neutrality, it could have big implications for business Internet use.
Netflix is trying to fix one problem: they are bandwidth hogs, using a third or so of all downloading bandwidth these days. Before the Comcast deal, Cablevision was one of the few American ISPs to take them up on using their own content delivery network and Open Connect caching appliances. With Comcast, Netflix is paying for the better connection, and “Comcast will connect to Netflix's servers at data centers operated by other companies,” according to the Wall Street Journal. One reason is that Comcast is one of the slowest providers of Netflix content: see this graph from GigaOm comparing Cablevision and Time Warner network speeds, and how far down the speed stack they are here. Ironically, Google fiber is at the top of the heap.
The Netflix deal also shows one problem with the Verizon ruling: the way the FCC looks at the world is so over. They would like to have a clear delineation between edge and broadband suppliers. Yet the two are often one and the same. Look at Verizon, AT&T and Cablevision, all of whom deliver broadband services to their ultimate customers and all of whom want to compete with Netflix and YouTube in delivering content too. Why should these broadband suppliers improve the video streaming experience for half of the bits that their major competitor delivers these days? That might mean they actually cared about their customers. Now Netflix and Comcast have joined forces.
Another issue is that the cable and phone companies deploy millions of legal dollars to try to edge each other out of the Internet connectivity business. That doesn’t really matter much for the average IT manager that still has to use local phone company lines to connect to the Internet.
So what do I recommend for businesses? Several things:
- Time to look closer at path diversity. Just because you have multiple Internet connections doesn’t mean you have enough path diversity. And as providers try to segregate what kinds of content they carry, it might be time to take a closer look here. As an example, take the case of Freddie Mac. Years ago they had four different ISPs, all with a common point of failure in a tunnel underneath Baltimore, many miles away from their Virginia offices. Now may be time to purchase additional connectivity from a different ISP, or at least make sure you understand your ISP routing maps.
- Find faster symmetric connections. Your access needs will change as you create more streamable content, but finding symmetric high-speed service could be a challenge. Chattanooga Tenn. has had symmetric 1 GB Internet service for several years now to all business and residential customers, thanks to their forward-thinking municipal electric utility. Google Fiber is just for residences. And Charter, for example, offers symmetric 10 GB services for businesses, but only if they install a fiber drop to your front door.
- Look more closely at AT&T’s Sponsored Data services. No one is saying that Internet service is going to get cheaper: it is likely to increase, just like everything else, when content providers pay for the right to stream video to your phone. What AT&T proposes is a way around the data caps that the mobile phone companies have set on data usage. Businesses will want to evaluate whether these sponsorships are worth it in the future. No one really knows where this sponsorship service is going, although “the idea of a 60 second pre-roll before a Netflix movie has an almost hallucinogenic quality for media buyers,” says Rob Norman of GroupM.
- It might be time to try private clouds, WAN acceleration or perhaps content delivery networks. All of these technologies can change your video streaming footprint and usage models, and perhaps keep you a step ahead of the next legal salvo from the courts or the FCC. Remember, broadband carriers charge each based on data volume at peak hours. If you don’t know your peak load Internet traffic and usage patterns, now is the time to figure that out.