It was perfect timing. Neelie Kroes chose this week to re-iterate her beliefs on Net Neutrality, likening it to the roads, but accepting that in order to avoid anarchy the roads have traffic lights, speed limits and a highway code and they are not free of charge.
We’re not sure that she would agree to stretch the analogy to fast lanes for the more privileged, or the addition of some private bypasses, not part of the road network, perhaps more like high speed trains, for those who freely want to share the risk of building them with operators.
One side of Net Neutrality is that nasty broadband suppliers take consumers hard earned money and fail to deliver an excellent experience. The other side of the coin is that past missteps have left the cellular industry in particular, and the content industry, sometimes at odds and sometimes misunderstanding one another.
There were moments of bathos at this week’s Mobile Video Global Summit held this week in Berlin, a veritable smorgasbord of vested interests, all come in search of a way to get along. Ostensibly the event was about ‘mobile video optimization, and in fact it was just this year that it dropped optimization from the event’s title. We bumped into DPI vendors like Allot Communications, Quickfire Networks, Avvasi, Vantrix and Saguna, sat alongside Cloud players like Equinix added to the constant re-assuring presence of Cisco.
Their overall message is ‘we are just trying to help the cellular operators,’ with better video optimization and they made sensible suggestions in debates about Quality of Experience tools and analytics, reporting tools that tell you when an OTT video was stalled, or brought helpful data to light about what a consumer prefers, a stalled video which then buffered and played in HD, or an SD experience which played now.
There was not a single person at the event with a single sinister bone in their body, and we know, we chaired those debates. But as Steelie Neelie herself points out, it’s just not that simple. At the tools level there was a simple assumption that ran through the event, ‘video on mobile networks is over the top video,’ but the Elephant in the room was very quiet and came in the form of operators, UAE based Du, Denmark’s TDC and Deutsche Telekom to name a few, who have their own HD video services, mostly IPTV, that can also be also found on their mobile networks.
Do they favor their own content? In effect they do, but each to his own and in slightly different ways. TDC has no plans to introduce seamless WiFi roaming in its territory, because the ‘consumers all know that it’s cheaper on WiFi and switch themselves.’ And what do they switch to, why the dominant player’s Wifi, which is both IPTV and cable from guess who’ TDC. And speaker Berdn Reul, VP product management, shrugged at the idea of seamless roaming. It was not his problem.
The aptly named Des O’Connor, (no relation ‘ but he had to end up in entertainment) VP data design at Deutsche Telekom was a little more vague. He conceded that DT ‘Did what it could,’ to ensure that T-Entertain content was delivered in as best shape as it could, without wishing to go into detail and while assuring us that it was all done within the guidelines of Neelie Kroes. But they may have changed by this morning (see earlier story).
What the DPI companies claim is perhaps more than they do, we’re not sure. They claim they can transrate and transcode, and also say that YouTube makes up more and more of both the traffic, and the problem. We think they’re right but would argue that this may not be the case for long. We also noted the Sandvine breakdown of traffic that it observed, as did consultant Gail Smith of the Cavell Group, who quoted it, that YouTube is obviously growing. But this is as much the gradual switch from 3G to LTE, which as Ben Cox, VP at EE in the UK pointed out, increased traffic by 2 to 3 times simply because YouTube would increase to HD just because it is on an LTE network.
In this kind of company, you get a real sense that cellular operators are the passive bystander who have really been wronged here. YouTube eats all the bandwidth that it can and the best thing that DPI solutions can do for cellular is to recognize it and force it to drop to a slower bit rate, rather than step up to the next level. As Marc Zionts, VP strategic Mobile service providers at Allot said, ‘it was a protocol written by handset players and content people, to try to grab as much bandwidth as it can, whether it needs it or not. No cellular people were consulted when it was written.’ The fact that Apple conceded this week that it is planning to take a long hard look at cellular data usage in conjunction with the US cellcos, testifies to this.
So Ms Kroes will have to tread carefully in the formulation of her Net Neutrality principles or all of the auctions for LTE spectrum could have been made in vain, and new networks will produce little more than millions of dissatisfied cellular customers who cannot even see cheap and nasty YouTube videos, because their protocols demand the type of bandwidth that should be reserved for UltraHD soccer games.
Which is why Smith from Cavell informed everyone about just how the cellular world is fighting back. After a variety of references to how badly YouTube plays on the Free cellular network, she pitched in adding, ‘It plays pretty badly on every ISP in France. Orange claims to have got money out of Google for delivery into its African networks, but this was more to do with ISP peering than net neutrality, and that’s Kroes Achilles heel. Like Comcast in the US, which charged the Netflix ISP more for what had become a heavily imbalanced peering arrangement, France Telecom and Free and others have attacked by either increasing their peering charges to the company that YouTube uses, or by failing to increase its throughput unless more funds were made available for peering. It shows that there is more than one way to skin the Net Neutrality cat.
But while YouTube wilts on the mobile in France, the result simply infuriates a worldly French consumer, who blames their cellular suppliers instead of blaming YouTube.
‘The Top 5 US supra-nationals are the top five traffic users everywhere in the world,’ pointed out Smith, but they have a global business,’ while of course the operators are all local. If it wasn’t for the fact that cellcos throw off so much cash right now, despite the threat of declining voice revenues, the upgrade costs to LTE, the high price of spectrum, the rising tide of video data requirements, and the indifference of both handset vendors and content owners to their plight, you might feel sorry for them. But in the midst of a global recession and a weak European market, the thoughts of Kroes are with the consumer.
There was one dissenting voice among all those nodding heads which embraced traffic shaping and video optimization, Louis Plissonneau, 3G IP traffic analyst at Orange in France. Plissonneau pointed to some research he had commissioned on YouTube. He showed a graph of data usage when an iPhone downloads a single clip of YouTube and another when a Samsung S3 downloads the same clip. The Samsung uses half as much data, because it adopts an approach of bursting 4 seconds of download at high speed and then playing it, while the iPhone drains data at its own rate. Plissonneau pointed out that if you stopped the download on the iPhone it had already collected lots of data ahead of where you had reached in viewing. Given that many people stop viewing and therefore stop the download, on the iPhone it had turned up its data delivery speed so that the entire video had already been delivered. Given that many people stop viewing YouTube videos halfway through, this seemed wasteful to him.
What it actually is, is careless, showing how Apple has such a tight control of the agenda here, it can impose protocols and data usage patterns on operators with an unhealthy disregard to the effects on the cellco, and surely this cannot be right. Commercial interest tells us that Orange cannot dare tell Apple to go away and fix it, but that same commercial interest cannot allow Orange to promote the Samsung device ahead of the iPhone, since it will have been incentivized in its Apple contract to ship and market the Apple product ahead of the Samsung or risk not getting it at all. Such is the bind of operators right now.
But despite this reality check, Kroes is adamant that she will introduce legislation on Net Neutrality, albeit carefully and with a heavy heart. She seems happy with traffic management, where such a policy is purely for the health of the network, not for financial gain, to protect time critical traffic from the less urgent traffic.
The big issues for Kroes and where she will hit hardest with regulations came out of a study carried out by European regulators which showed that online services are blocked or degraded ‘ often without consumers’ knowledge and says that one in five fixed lines, and more than one in three mobile users experience this. Start-ups are being targeted because they have less weight to fight against operators and that, she says is counter intuitive.
Her other beef is that many Europeans are not getting the broadband speed they are paying for or which they see advertised. Again the technologists at our conference were huffing and puffing calling for standards and promising that in 2 to 3 years they will have a handle on what causes video to stall, and will be able to tune their networks in real time. But even then they may have no idea of what speed they could advertise, because the speed you get depends on the nature of the traffic, what the protocol that drives it is doing and who else is on the network.
The Kroes comments brought immediate frustration and reaction from leaders at the GSMA who expressed ‘disappointment’ a the idea of early intervention on net neutrality. We wonder if she will also legislate against Apple for wasteful use of European cellular networks. We rather think not, but someone should at some point, or maybe that will be part of the EU investigation into Apple practices.
Much of the Kroes rant was then targeted at cellcos that want to block services like Skype and WhatApp. There was nobody wanting to do that at the Mobile Video conference, so while she promised action against any ISPs deliberately degrading those services or blocking, simply to avoid the competition, it doesn’t look to us like that will be widespread. The Cellcos we spoke to were barely at the point of tracking these apps and working out how much more traffic they generated, and smoothing their service to make them work and all that is at the technical level, not the management level, so we doubt that blocking it has become that advanced.
Kroes seems to know this, but takes the view that without legislation bad things will continue to happen. And if it’s not yet illegal, then people are unsure whether or not they should stop.
But if attacking Google’s YouTube peering partners is one way to get around forcing payments out of these big five US multinationals, then there are others and these were explored at the Mobile Video Global Summit, especially in the last panel of the show.
When O’Connor from Deutsche was asked if the right approach to mobile video might not be to partner with key players over a managed part of the network, he said, ‘That’s the entire reason I am at this event,’ and talked about creating and exposing network APIs to such partners. An earlier presentation from EE Network Strategy Management Matt Stagg, had isolated a magic number, which was ‘how much capacity do you think you could harness for privileged partners to make sure that their video hardly ever stalled and which enjoyed low latency. The answer everyone seemed to agree was 15%, and then the rest of the traffic would not get anything other than best effort, but it would not be noticeably worse best effort than it is right now.
In other words you could offer your own service or partners up to 15% of your total data capacity, some kind of premium ‘ whether that was paid for by revenue share, payment, shared risk, whatever.
O’Connor was also immediately impressed by what Philippe Brodeur had achieved at AerTV, the OTT Magnet subsidiary in Ireland, which had put together an IPTV service, and had also added some extremely low cost channels of its own, one in particular that focused on regionalized and local sports.
This chairman (me) jokingly suggested that they form a joint venture and repeat the exercise in Germany and both reacted like I had given away their business secrets, since this was clearly the type of deal they were starting to think seriously about already.
Which only goes to show that although the tone of this conference was that the walled garden is dead and that true video is OTT, it can still be better managed if it is in the data portion of the delivery, but not necessarily lumped in with all the best effort internet.
When faced with the idea that TV Everywhere strategies will soon make up the greatest portion of video to a portable device, the entire room was confident that YouTube was the real worry, since that is consumed on the move, and so goes over cellular. WiFi has taken the brunt of TV Everywhere so far, both in Europe and in the US, with figures as high as 80% plus of such video being watched on WiFi without any formal offloading other than the consumer knowing it was cheaper and shifting the link to Wifi.
One final journey from an angry but not so young man, was that of John Nolan the head of commercial and digital division at All3Media. Nolan travelled miles during the two day event starting with an impassioned plea asking why mobile didn’t give a damn about his content, when it made up 40% of the UK’s Channel 4 ‘I get nothing out of mobile, nothing at all, not a penny.’
By the end of the show he understood how hard all the vendors and operators were working just so that one of his main partners, YouTube could be watched Over The Top, with the lowest amount of stalls, and the least amount of waiting, and finished, ‘I had no idea I got so much from mobile.’ There was a feeling at the show that Neelie Kroes needs to travel the same route to Damascus.
Which is fine for a content player like All3Media, but everyone is so busy trying to keep up with the requirements on cellular data these days, imposed by media that they have forgotten their mantra, ‘We are more than just a bit pipe,’ because without buying broadcasters, contracting with content, speeding up TV Everywhere and re-building the Garden Wall, they risk becoming little more than a bit pipe, which in a few years, really won’t be throwing off quite so much money.