Something that’s bothered me for a while now, but an issue I put to one side (until yesterday) is the question of what happens if the backbone ISP’s get to the point where they refuse to continue investing in bandwidth across peering points?
Many in the VC industry, including myself have relied on the perpetuation of bandwidth across the internet expanding ad-infinitum, keeping step with consumer demand. This has meant, in the main, that VC call quality over the internet has been perfectly adequate for most meetings, and an enabler of new working practices (home and remote workers for example).
Whilst I don’t profess to be an expert in ISP peering economics, I did wonder if there would ever be a situation where diminishing returns (or increased power and control) for these ISPs would result in them holding the rest of the internet to ransom, to renegotiate the terms of how they generate money for their bandwidth.
And so now we see the first incidence of this behaviour with Comcast brokering a huge deal with Netflix, a large contributor to internet bandwidth growth in the past 5 years, and accounting for a third of US internet bandwidth consumption.
We saw something similar unfold in the UK, with ISP’s twice demanding more revenue from the BBC resulting from the launch of its iPlayer service, and again when iPlayer offered HD content. It took UK government intervention to prevent the ISP’s from changing the model.
So what do this mean for business video communications?
The precedent set by Comcast/Netflix is concerning. Already businesses are using the internet on an increasing basis to conduct its video meetings, whether this be WebEx, BlueJeans or other Internet based service providers.
Video service users within organisations are typically unaware that internet based services of this kind are provided without any kind of SLA. But until now that’s been ok, the Internet has been fine at coping with the growth in demand for bandwidth.
This might be about to change. Comcast/ Netflix sets a worrying precedent where the deliberate inaction of ISP to invest in their core and peering bandwidths becomes a legitimate practice to secure greater revenues from organisations that generate high bandwidth internet traffic.
We already see internet providers today specifically geared to providing ‘quality assured’ internet transit for video communications. Could this become the norm for Business video communications?
Whatever we have in store, it’s only likely to drive up costs.
One mitigation strategy could be for customers to use fixed connectivity into videoconferencing clearinghouses / service providers. This approach provides cost certainty, and importantly an SLA.