Skip to main content

Understanding the Real Net Neutrality Puzzle

Incumbent network operators that are hoping to boost revenues by charging premium fees for delivery of some broadband content are likely to realize modest gains if current rules that guarantee so-called net neutrality are eliminated, according to a new report from Light Reading Insider.

"At first glance, charges for the delivery of Internet content look as though they could provide an additional $10.7 billion in carrier revenues by 2010," notes Simon Sherrington, research analyst for Light Reading Insider. "Such fees could expand carrier business data revenues by around 16 to 17 percent in the U.S. alone and would go a long way toward improving profitability and financing new infrastructure deployment."

But a variety of factors � including potential customer churn, competitive pressures from operators that maintain net-neutrality policies, and the ongoing threat of re-regulation � would likely diminish those revenue gains, Sherrington says. "If operators could persuade companies representing 20 percent of the consumer content market to pay a premium for improved content delivery, they could open a market worth around $309 million in the U.S. by 2010. Accessing 20 percent of the business information and ecommerce markets could open up a further $1.8 billion by 2010."

Other key findings of the report include:

In practice, the widespread imposition of content delivery charges looks highly unlikely. The difficulties associated with collecting fees from the global content provider community, managing the churn risk among consumer and business customers, and fending off competitors makes it highly unlikely that any individual broadband operator could successfully and unilaterally impose fees for content delivery.

Although the introduction of selective charges to boost revenue appears more attractive financially than the wider imposition of charges, operators using selective charging mechanisms to prevent competitors from undercutting them or to prevent revenue losses are likely to face close scrutiny by regulators.

Broadband operators hoping to generate revenues from content delivery need to offer improved services that content providers will buy. Operators must identify and provide significant value adds that enable content providers to improve the experience offered to customers.

Network operators would essentially become direct competitors to providers of content delivery networks, such as Akamai, Mirror Image Internet, PantherExpress, Savvis, and VitalStream.

However, broadband network operators must recognize that their content sourcing partners -- like the movie studios and broadcast TV networks, plus their web portal partners -- are actively pursuing direct-to-consumer delivery models that essentially bypass all distribution partners, which will be enabled by P2P platforms like BitTorrent (that can't easily be blocked or handicapped).

Popular posts from this blog

How Cloud Fuels Digital Business Transformation

Across the globe, many CEOs invested in initiatives to expand their digital offerings. User experience enhancements that are enabled by business technology were a priority in many industries. Worldwide end-user spending on public cloud services is forecast to grow 21.7 percent to a total of $597.3 billion in 2023 -- that's up from $491 billion in 2022, according to the latest market study by Gartner. Cloud computing is driving the next phase of digital transformation, as organizations pursue disruption through technologies like generative Artificial Intelligence (AI), Web3, and enterprise Metaverse. Public Cloud Computing Market Development "Hyperscale cloud providers are driving the cloud agenda," said Sid Nag, vice president at Gartner . Organizations view cloud computing as a highly strategic platform for digital transformation initiatives, which requires providers to offer new capabilities as the competition for digital business escalates. "For example, generativ

Digital Talent Demand Exceeds Supply in Asia-Pac

Even the savviest CEO's desire for a digital transformation advantage has to face the global market reality -- there simply isn't enough skilled and experienced talent available to meet demand. According to the latest market study by IDC, around 60-80 percent of Asia-Pacific (AP) organizations find it "difficult" or "extremely difficult" to fill many IT roles -- including cybersecurity, software development, and data insight professionals. Major consequences of the skills shortage are increased workload on remaining digital business and IT employees, increased security risks, and loss of "hard-to-replace" critical transformation knowledge. Digital Business Talent Market Development Although big tech companies' layoffs are making headlines, they are not representative of the overall global marketplace. Ongoing difficulty to fill key practitioner vacancies is still among the top issues faced by leaders across industries. "Skills are difficul

Mobile Device Market Still Awaiting Recovery

The mobile devices market has experienced three years of unpredictable demand. The global pandemic, geopolitical pressures, supply chain issues, and macroeconomic headwinds have hindered the sector's consistent growth potential. This extremely challenging environment has dramatically affected both demand and supply chains. It has led to subsequent inflationary pressures, leading to a worsening global cost of living crisis suppressing growth and confidence in the sector. In tandem, mobile device industry stakeholders have become more cautious triggering market uncertainties. Mobile Device Market Development Operating under such a backdrop, the development of mobile device ecosystems and vendor landscapes have been impacted severely. Many of these market pressures persisted throughout 2022 and now into 2023, borne chiefly by the smartphone market. According to the latest worldwide market study by ABI Research, worldwide smartphone shipments in 2022 declined 9.6 percent Year-over-Year