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The crushing demands of video delivery and mobile devices are changing the economics of the Internet


December 2, 2010, 5:00PM EST


By Peter Burrows


When asked at the Web 2.0 conference in mid-November, Netflix Chief Executive Officer Reed Hastings was asked whether the Internet's infrastructure can withstand the strain as his streaming business grows. "If there's anything you'd want to bet on," said Hastings, "it's that technology will make bandwidth faster and cheaper."


That bet may not be as safe as it seems.


more http://www.businessweek.com/magazine...7043617708.htm
 

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The "crushing demands" of video delivery aren't really as much of a problem as people think. But it will take cooperation between the content providers and the last mile providers.


Basically, what needs to be done is what Akamai is already doing. The bits need to be served from within an ISPs internal network. If 1000 people want to stream a popular movie, it makes sense for Netflix to deliver a single copy of that movie to a server within Comcast's local network. Then the 1000 streams don't need to traverse the Internet at large. This sort of thing is what Akamai already does; apparently the battle between Level 3 and Comcast is because Level 3 doesn't have those servers within Comcast's network.


Comcast is already doing something similar for VOD, albeit using their TV pipes rather than their IP pipes. So, many of the problems already have solutions (generally speaking).


These problems are easily solved with some cooperation. But Comcast wants to extract as much revenue as possible from this new paradigm.


I think the bigger problem is that Comcast's IP pipes don't flow very well in the last mile to the individual subscribers. Instead they are shared with TV, leaving very little for IP. That's a tougher problem for Comcast to solve. Contrast with the approach Verizon took with FiOS. In principle, using GPON, Verizon can deliver an aggregate of over 2000 Mbits/second to split among potentially 32 households. Comcast probably wishes its architecture could achieve 5% of that bandwidth.
 

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But their executives need that money for their bonuses to buy those yachts, jets and mansions (ones outside of the US) instead of investing in more and better pipes. We don't want them to feel deprived do we?
 
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