Amdocs on Network Optimization Competition

During Amdocs' Q4 2015 earning call, a question was asked about the network optimization market, to which the company has entered using several acquisitions - Celcite (2014, $129M, here) and Actix (2013, $120M, here)

[related post - "Amdocs CEO: 'Network Optimization Business is Slow'" - here]

[Q]  Tom Roderick [pictured], Stifel Nicolaus, Analyst

.. Eli. Curious for your additional thoughts on the competitive landscape and the network optimization business. You mentioned, I think, obviously you guys have been the disruptor in that market. I know Cisco has made some moves competitively. Some of the other NEPs have, as well. What are they doing, what are the traditional network equipment providers doing to protect their position, whether it's through pricing or bundling or things of that nature and how, what are they doing as a response to your disruption in the market?

[A] Eli Gelman [pictured], President & CEO. Amdocs:
    

To be honest, the first thing they do is they try to use a lot of fear against us, because we are the new guys in this area. They will try to slow this thing as much as they can. They will not announce it necessarily, but we see from everywhere. It's not like a specific company I can tell you all the guys that are producing a lot of boxes are trying actively to slow down this trend. I don't think they can do it. Even if they slow it down, it would not take, let's say, five years to come to full fruition. Maybe it will take seven years. You can not slow this down.

And I'll tell you more than that. Carriers cannot afford not to do it, because otherwise, the big guys will do it themselves. Level 3 will do it. Amazon would do it. They will build their own networks. And if the carriers are not careful, both, by the way, MSOs, the Comcasts and the Charter of the world, and the AT&T and Verizon of the world, if they would not do it, other people will do it for them or to them. So they have to do it.

The providers will try to slow it as much as possible. They say that they are investing in it and all of that. I don't think so. And every time that they see that they are a buying company, we've seen in several cases like this, they kill the company. In other words, they buy companies that have some momentum in this area and especially to kill them and not to build them. And we have a very different opinion. We have a different opinion that we have infrastructure and new components and new theory and new approach to this entire thing. And we'll see. We'll have the best man win.

See "Edited Transcript of DOX earnings conference call or presentation 10-Nov-15 10:00pm GMT" - here.

M-LAB Blames Transit Carriers for ISPs Service Performance Degradation

A new report by M-Lab concludes that "we observed sustained performance degradation experienced by customers of Access ISPs AT&T, Comcast, Centurylink, Time Warner Cable, and Verizon when their traffic passed over interconnections with Transit ISPs Cogent Communications, Level 3 Communications, and XO Communications.

In a large number of cases we observed similar patterns of performance degradation whenever and wherever specific pairs of Access/Transit ISPs interconnected. From this we conclude that ISP interconnection has a substantial impact on consumer internet performance -- sometimes a severely negative impact -- and that business relationships between ISPs, and not major technical problems, are at the root of the problems we observed.

Observed performance degradation was nearly always diurnal, such that performance for access ISP customers was significantly worse during peak use hours, defined by the Federal Communications Commission (FCC) as the hours between 7pm and 11pm local time. This allows us to conclude that congestion and under-provisioning were causal factors in the observed degradation symptoms. 

It is important to note that while we can infer that performance degradation is interconnection-related, we do not have the contractual details and histories of individual interconnection agreements. As such, we cannot conclude whether parties apart from the two we identify are also involved (e.g. in the case that an Access ISP shares an interconnection point with another, etc.). We leave this non-technical question open for further study by others and focus here on the impact of what we can observe on consumer performance through measurement".

See "ISP Interconnection and its Impact on Consumer Internet Performance" - here.

Apple's CDN Goes Live; Increases Capacity 10x

 
Dan Rayburn [pictured] reports to Streaming Media that "Recently, Apple’s CDN has gone live in the U.S. and Europe and the company is now delivering some of their own content, directly to consumers. In addition, Apple has interconnect deals in place with multiple ISPs, including Comcast and others, and has paid to get direct access to their networks .. From ISPs I have spoken with, they tell me Apple has put a massive amount of capacity in place, with many saying that Apple has more than 10x the capacity they are using today, all ready to go."

[related post: "CDN Helps ISP to Manage iOS5 Update Traffic" - here]

"While Apple will probably never completely move away from third-party CDNs, like Netflix did, they will rely less on third-party CDNs over time, just like we have seen with Microsoft, YouTube and others. Level 3 will be able to make up for lost CDN business as they are one of the vendors that Apple is buying wavelengths, IP transit, fiber and other infrastructure services from .. It is also important to point out that decisions around who (Apple/Akamai/Level 3) delivers what (updates, streaming, apps, radio) to whom (ISP customers, different devices etc.) are under Apple’s control"

See "Apple’s CDN Now Live: Has Paid Deals With ISPs, Massive Capacity In Place" - here.

How did Cable ONE Get Google's "YouTube HD Verified" Certification?

Cable ONE announced that "Google recently rated Cable ONE High Speed Internet “YouTube HD Verified” - a certification given only to Internet Service Providers (ISPs) who consistently offer a connection stable enough to stream HD (720p) video without interruption or buffering .. Cable ONE offers speeds ranging from 50Mbps to 70Mbps - ideal for streaming multiple movies or videos at the same time, offering more power for online games, and giving customers the ability to share photos in the blink of an eye." (See "Google Rates Cable ONE 'YouTube HD Verified'" - here).

Brian Santo, reporting to CED Magazine, adds: "Brad Ottley. Cable One’s director of internet operations, said that Cable One delivers YouTube video through a peering arrangement with Level 3. In a written exchange, Ottley attributed Cable One’s results with Google/YouTube to “Low latency with Level 3 and Internet speeds of 50MB contribute to our YouTube HD Verified status. Transparent caching is a technique for smoothing out the delivery of web-based content (video and otherwise). Ottley said Cable One used transparent caching only in its system in Fargo".

See"Cable One excels at delivering YouTube, says Google" - here.

[Survey]: 79% of Top European Retail Sites do not use CDN

A vast majority of the top European retail sites do not use CDN, according to a new survey by Radware and Level 3. 

The survey finds that " .. 3 out of 4 of Europe’s top 400 retail websites take more than 3 seconds to load, failing to meet online shoppers’ performance demands. Numerous user experience studies have found that most online shoppers will abandon a page after waiting 3 seconds for it to load. 

The survey’s key findings include: 

• The median load time for first-time visitors was 7.04 seconds.
• 1 out of 4 sites took more than 10 seconds to load.
• 79% of sites did not use a content delivery network (CDN)
• 78 out of 400 sites do not use text compression

See "Radware and Level 3 Announce Key Findings on Page Speed of Europe's Top 400 Retail Websites" - here.

QoS/CDN Announcements: Level 3 Optimizes Bandwidth for On-line Gaming

 

Level3 introduced the ".. Bandwidth Optimizer – a service that combines the power of a global High Speed IP (HSIP) transit network with Level 3's content delivery network (CDN) platform to maximize and optimize bandwidth efficiency .. Designed specifically with the online gaming industry in mind, Level 3's Bandwidth Optimizer offers access to both HSIP [High Speed IP] and CDN services, which can be used interchangeably [see chart below]. This not only affords customers the flexibility to access the right amount of bandwidth at the right time, but also significantly reduces risk of service delays during game launches and updates"

See - press release "Level 3 Introduces Bandwidth Solution that Offers One-Stop Shop for Gaming Companies" - here and solution document - here.

Level 3 vs. Comcast - Charging for Off-Net Internet Video?

   

Is Comcast encouraged by its win against the FCC (here) and decided to take it one step further in order to support its own (or NBC's) video content- or this is just a business argument over settlement-free peering agreement?

Level 3 Communications [a CDN operator, won recently a new contract with the popular video streaming service NetFlix - here see map below] issued a press release saying that "On November 19, 2010, Comcast informed Level 3 that, for the first time, it will demand a recurring fee from Level 3 to transmit Internet online movies and other content to Comcast's customers who request such content".

See "Level 3 Communications Issues Statement Concerning Comcast's Actions" - here.

Thomas Stortz, Chief Legal Officer of Level 3, is quoted saying that "By taking this action, Comcast is effectively putting up a toll booth at the borders of its broadband Internet access network, enabling it to unilaterally decide how much to charge for content which competes with its own cable TV and Xfinity delivered content. This action by Comcast threatens the open Internet and is a clear abuse of the dominant control that Comcast exerts in broadband access markets as the nation’s largest cable provider .. Level 3 believes Comcast’s current position violates the spirit and letter of the FCC’s proposed Internet Policy principles and other regulations and statutes, as well as Comcast’s previous public statements about favoring an open Internet"

Comcast's response, by Joe Waz, SVP, External Affairs and Public Policy Counsel was "Level 3 has inaccurately portrayed the commercial negotiations between it and Comcast. These discussions have nothing to do with Level 3's desire to distribute different types of network traffic. Comcast has long established and mutually acceptable commercial arrangements with Level 3's Content Delivery Network (CDN) competitors in delivering the same types of traffic to our customers. Comcast offered Level 3 the same terms it offers to Level 3's CDN competitors for the same traffic. But Level 3 is trying to gain an unfair business advantage over its CDN competitors by claiming it's entitled to be treated differently and trying to force Comcast to give Level 3 unlimited and highly imbalanced traffic and shift all the cost onto Comcast and its customers."

See "Comcast Comments on Level 3" - here.

Complicated, but probably another opportunity for the traffic management market.