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22 September 2022

Open Caching waits for content first-movers, CDNs left seething

In the wake of IBC, where the Streaming Video Technology Alliance (SVTA) rattled its Open Caching sabers, it seems clearer that a major showdown between the incumbent CDNs and the new wave of Open Caching advocates is looming. On the horizon, in the next few years, a war of words is about to kick off, and neither side is going to escape without injury.

At risk are billions of dollars of annual revenues. Plainly stated, Open Caching would see large volumes of traffic that conventionally traveled through CDNs shifted inside the ISP networks.

While we are aware of the argument that private CDNs are making, about Open Caching bringing supplementary revenues on top of traffic they are already being paid to deliver, the bigger picture is still a loss of CDN revenue, as customer requests for video data would instead be served by the Open Caching servers within the ISP network.

For the OTT content providers, this shift would entail paying the ISPs and Open Caching partners for delivering video, rather than the CDN providers. It is currently unclear how these relationships will be negotiated and managed, and there are still questions of how regulators concerned with net neutrality will react to ISPs brokering deals that could prioritize traffic delivery.

For example, if a content provider currently used two CDNs, in a multi-CDN configuration, it only has to worry about maintaining two business relationships. If it wanted to switch to Open Caching, then it would have to have some form of deal in place with every major ISP in every country it operates in. This sounds unworkable, and would require some sort of mediator, to act as the middleman. No wonder CDNs are bemused.

The SVTA does not have a CDN consensus, via its membership. Akamai and Cloudflare are noticeably absent, and while Amazon’s AWS and Google’s Cloud Platform are present, Microsoft is not – meaning there is a gap in the big-three cloud computing platforms. While Edgio, Fastly, and Lumen are familiar to the Faultline readership, when viewing the total market share of the video CDN marketplace that is represented by SVTA members, there is a considerable gap.

It will be hardly surprising when those absent CDN vendors attempt to circle the wagons, as Open Caching matures. They will likely pressure regulators to examine those deals, arguing that the paid prioritization should be subject to scrutiny.

But while the CDN vendors would be pushed to the side, in an ISP that has implemented Open Caching, the more pressing question is how long can rival content services play nicely. In the pay TV world, channel blackouts are not exactly rare, and it is not hard to envision how an ISP could argue that an OTT service needs to be blacked-out because it has not met its contractual Open Caching agreements.

As such, commercial agreements are going to be make-or-break for Open Caching. Delivering video was not an original part of the internet’s design, and consequently has effectively been grafted onto the system that first emerged to deliver text.

If built from scratch, the networks and infrastructure would look very different – likely exploiting multicast capabilities and dynamic caching, and likely consolidated around a single access network technology, instead of the variety of cables used today.

CDNs, as such, are the best current solution to the problem of delivering video files to the viewers. The CDNs monitor network traffic to determine what content should be cached, and then charge the content owner for this service – as the alternative would be a hefty peering bill due to a tier 1 ISP or a cloud platform.

Open Caching, put very simply, would create caching servers within the ISP access network. In the best-case scenario, one copy of a video would make its way from the origin server into the access network, where it would then be cached, and served to all viewers within the network.

Of course, we have to factor in the additional ABR copies of each title, as not all viewers are using the same devices, but the main point here is that the bulk of the video traffic becomes almost entirely internal to the ISP access network – saving the ISP a considerable amount of traffic peering charges.

The demand for CDNs, both public and private, would greatly diminish, in an Open Caching deployment. The ‘open’ part of Open Caching should keep the content players happy, as they are sharing infrastructure and receiving the shared benefits. However, there is nothing really stopping a content supplier negotiating a standalone deal with an ISP, using the same architecture.

This may have rung bells for some readers, who will recall Netflix’s Open Connect project, and the hostility with which it was met by Comcast. The key difference between that and the Open Caching approach is the shared resources of the latter. However, to date, there are no active Open Caching projects that are being shared by two or more content providers, that we are aware of.

The Disney and Verizon installation has been covered in Faultline, but while there are other live projects, such as TIM in Brazil, there has not been public confirmation that these are seeing cash change hands between the content owners and the ISPs.

This sets the stage for the next phase in the Open Caching debate. The CDN providers are essentially wholesalers, selling capacity and services to whichever company wants to pay for them. Should a customer want or need to, a private CDN can be commissioned, or a particularly motivated customer could simply license CDN software from a vendor and create a DIY implementation.

The public CDN providers will argue that the Open Caching agreements between the ISPs and content providers are in breach of the ‘open’ part of the name, and not in the spirit of net neutrality. They will likely point to their service records too, and make claims that feature the terms ‘resilient,’ ‘track record,’ and ‘leading’ prominently, and that CDNs should be maintained as they have shown the world the most efficient way to deliver video.

On the sidelines, the WebRTC and multicast-ABR vendors will work themselves into a frenzy, trying to find the best moment to leap into the fray, and until there is some proof in the ‘open’ part of Open Caching, the CDN marketing departments will chalk up easy victories.

In the meantime, the Open Caching community will need to prove the detractors wrong. IBC 2023 sounds like a good target milestone, for the first flagship multi-user Open Caching project – where content providers go on record to talk up the benefits of the technology. The crowning moment for Open Caching would be a deal in a major ISP that sees Netflix and Disney playing nice.

Until then, skepticism will prevail.