Wednesday, November 23, 2011

Dean Bubley: "application-based charging for mobile data won't work"

While my blog often advocates DPI based policy management as a way to increase ARPU and I think it is fair to show other opinions, such the one [also often] expressed by Dean Bubley (pictured), founder of Disruptive Analysis.

In a his recent blog post, following the Broadband Traffic Management Congress held last week, Dean adds another reason as for why he doesn't believe in such business model - although " lots of DPI and PCRF vendors have spent a lot of money on custom silicon and software to crunch through "traffic" and have promoted standards like 3GPP's new "Traffic Detection Function", and are now determined to justify the hype".

Dean goes back to the old issue of "cat-and-mouse game" between the application/content creators and the DPI systems trying to identify the traffic, as well as the difficulty in defining the boundaries of each application or service. This was indeed the main challenge when DPI systems when their main use was to limit P2P and VoIP traffic, but then the time it took the vendors to support new or updated protocols was not critical.

When traffic classification is attached to revenues - the time required to make the necessary changes (see "The Challenges of Maintaining a Current DPI "Signatures File" - here and "Rogers [Canada] Admits its P2P Traffic Management Impacts Interactive Gaming" - here and here) becomes very critical. Also, "zero-rating" plans maybe charged (or counted towards volume-caps) breaching the service plans terms.

These are valid arguments, as long as the ISP and the content providers are acting as "enemies" - and the ISP tries to monetize popular content. However, a partnership between the two may create a win-win situation, justified by new revenues to the OTT, derived from improved service. See for example - "Yankee Group: MNOs Should Give Customers Choices for VoIP" - here or even Dean's comment to my previous post "DT Believes in "Two-Sided" Business Model - OTT to Pay for QoS" - here.

Nevertheless, such model does not follow the very basic logic that is behind Net Neutrality, as it provides an unfair advantage to the large content owners and may simply kill the ability of new startups to reach the masses (see recent EU decision - here).

See "Another reason why application-based charging for mobile data won't work" - here.

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