Report sees Internet becoming an OTT battleground
The Internet will become a battleground between a new breed of online video service delivery players and the old line guard of wireline telcos and cable operators, an Informa Telecoms & Media report, "Internet Innovation," contends, as the new players balk at the idea of paying to ride on incumbent networks and, instead, offer up their own content delivery networks (CDNs) to work on existing technology.
Online players like Google (Nasdaq: GOOG), Amazon.com (Nasdaq: AMZN), Netflix (Nasdaq: NFLX) and Microsoft (Nasdaq: MSFT) think they can win the day by building their own Internet content delivery infrastructure that use techniques like edge caching on operator networks with Internet Exchange Points (IXPs), according to an Informa news release.
These new players, the report contends, feel their approach will help existing service providers carry increased OTT traffic. It will also stop those same operators from potentially demanding that online video service delivery players pay up for the use of their networks, such as has been the case in Europe, where operators like Orange, Vodafone and Telefonica "have been particularly vocal in calling for the introduction of wholesale charges based on the volume of data traffic passing through their networks," the news release said.
These calls for reform and a standardized payment model will not be answered and "the next decade will see the emergence of multiple commercial and technological arrangements for managing the relationship between telcos and content providers, including bandwidth-management strategies, content caching and delivery technologies," the news release said.
While the report doesn't necessarily touch on it, Netflix has been moving forward in the CDN space in the United States with an arrangement with Cablevision (NYSE: CVC) to place storage appliances near the MSO's Optimum network, which would allow for the delivery of "super HD" programming and 3D content to Cablevision customers who also subscribe to Netflix. Cablevision joined Mexico's Telmex, Canada's Telus (Toronto: T.TO), Virgin Media (Nasdaq: VMED) and BT (NYSE: BT) in the U.K. as part of the Netflix program for which Netflix says it doesn't charge ISPs in the program fees to receive its online video programming directly at interconnection points.
- Informa Telecoms & Media issued this press release