A couple of days back, we highlighted a webinar being conducted by technology firms OpenNet and Allot Communications. In that webinar was a slide showing off a network management service that would allow carriers to charge based on service — you could be charged more for using Facebook or other popular websites over your standard website. It would effectively destroy the internet and hand over all control to carriers.
One of the companies which developed the presented technology, OpenNet, has come forward today with a post on the company’s blog, explaining exactly their position in the whole charge-per-service hysteria that’s exploded over the last couple of days. Jump inside for the full rundown…
The anticipated passing of the FCC bill regarding Net Neutrality is being closely monitored, and for good reason. To many there is a great deal at stake because most opinions center on an all or nothing scenario – either consumers have freedom and choice without financial restrictions, or operators and service providers will create draconian pricing plans that completely abolish the current models and choke the masses’ access to information and entertainment.
And while healthy debate is always needed in a democracy, history shows that the polarizing views most of us see end up as just that – views that don’t reflect the reality of what ends of taking place in the marketplace. What is being forgotten in the recent media conversations (some of which is being stoked by a webinar with our own partner Allot) is that just because there is a potential to use a technology a certain way, that doesn’t mean you should. The webinar discussion is based in a fundamental reality surrounding bandwidth congestion that will impact everyone involved – operators and consumers alike.
To be clear on Openet’s stance – we sell technology. We do many times explore with operators HOW it can be used but we don’t ultimately make those decisions. The operators do. We do have a position on what they SHOULD do as outlined below, but this is purely an opinion rather than a planned course of action.
- Right now the majority of media (and consumer online responses) are characterizing this incorrectly or incompletely. The majority seem to believe that we’re suggesting operators charge consumers merely for the ability to use certain applications and content. What we’re trying to make clear is that as the networks become increasingly congested; we have the ability to give some users a premium service. Some users don’t need it – all they need is the ability to check email and surf internet sites. ISPs can prioritize traffic, increase bandwidth and otherwise ensure a great experience during congestion for those users who want and need those capabilities.
- This approach could help operators reduce their overall network build out costs and therefore can charge less to maintain profits. For example, with the ability to create a “surfers only” package (no video, VoIP, P2P, etc – or pay per use for these), operators can offer a “basic” service package for a far lower cost than they can now. Said another way, the current price plans are based around the average user rather than the low end user. With policy control, you can create packages targeted at any level of user.
- Following on this, there’s value being delivered to those users described above and beyond that to users with simple requirements. Should the operator not have a right to realize increased revenue for increased value delivered? Do consumers expect a flat rate, all you can eat service from content and application providers? Even if the content or applications are free, over the top providers have the right to realize incremental revenue from advertising as usage increases (more eyeballs should equal more revenue, which will drive newer and better services).
- One business model that Openet promotes is that the over-the-top providers share revenue with operators in order to have traffic prioritized and bandwidth shaped in order to guarantee high quality delivery. Openet isn’t of the opinion that the ONLY option is for consumers to pay extra fees. We simply believe that operators aren’t receiving a fair portion of the revenue in the value chain for their value within it.
- Lastly, its Openet’s stance that whatever service packages operators deploy, they MUST treat traffic from over the top application and content providers in the same manner to traffic from their own internally offered applications and content. For example, Hulu and YouTube must receive the same traffic management as that from content aggregated and delivered by the operator themselves. Operators should NOT be allowed to discriminate against competitive over the top content and applications.
As we understand it the new rules will also require disclosure on any changes to a consumer’s billing status, giving users immediate and full transparency into what they are using and being charged for, and this of course is a good thing for all parties involved. As this debate evolves, we will continue to explore with operators the best way to deliver high quality experiences to their entire customer base, and we encourage all involved to approach the issues with the larger realities in mind.
OpenNet does have a valid point here. Being able to charge lite user a nominal fee for checking non-resource heavy websites while charing streaming video addicts a slightly higher fee sounds great. But the truth is things never work like that. Take for example all of the data plan tiers that are cropping up in the U.S. Not a single data plan offered by an U.S. carrier is “fair”. 2 GB for $25 and $10 for each additional GB? Please. “Unlimited” data plans capped at 5 GB with anything higher considered “excessive”. Sounds more like a chance for out of touch companies to nickel and dime consumers even more.
The reality is that whenever technologies such as what is being proposed by OpenNet are incorporated by major corporations, the “fairness” aspect will be thrown to the wayside in name of the almighty dollar. Instead of fairly priced plans, we’ll get more of what we already have — overpriced, underperforming junk.
And what exactly do we consider fair? See below:
- “Lite” Data Plan: 20 GB @ $10/month
- “Mid-Range” Data Plan: 60GB @ $20/month
- “Heavy” Data Plan: 80 GB @ $30/month
The above plans will give “lite” users more than they would typically use. But where’s the harm? At the same time, the higher caps will give end users some actual usable bandwidth to make use of new and emerging technologies such as music streaming, video, and other types of rich multimedia — precisely the thing that carriers claim to be possible with their super fast, capped networks.
In the end, we the consumer deserve better. And as much as people would like to believe that “the right thing will eventually prevail”, the sad truth is that it never does.
