NTV Live Panel: The Network Makeover

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What are the broadband giants doing amidst the explosion of online video?

Moderator: Om Malik, GigaOM.

Panelists: Mike Afergan, Akamai; Kip Compton, Cisco; Jeff Harris, Verizon; Hilmi Ozguc, Maven Networks; Grant van Rooyen, Level 3.

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“It makes your network scream,” Harris said of the explosion of video online.

“It isn’t at the network layer.” Afergan of Akamai said. It is the behavior patterns of consumers. the sophistication and robustness online video world is the most important trend. “On the network layer in terms of videos you see much greater volume and much greater quality.”

Om repeated the question of ‘How much video traffic is flowing over your network?’ serveral times and every time the network giants dodged, saying they don’t break down their traffic numbers that way.

To Om’s question of ‘How much money are you spending on upgrading your systems?’ we heard that Level 3 is putting “in excess of $600 million” into upgrading the network, much of which to support more, higher quality video.

“We’re now at a point where we need to add volume and reliability,” Kip Compton of Cisco added.

The issue of longer form content is still a point of speculation that will demand different things of networks as the market mature. However, it the mean time “It’s still 2 or 3 minutes clips but people seem to consumer a great deal of them,” Ozguc commented.

“We’re at the tip of the iceberg with internet video,” van Rooyen said. “You’ve got to both handle scale and great flexibility at the lowest cost.” If you consider that the average household in the US watches 8 hour of television a day and look at how much of that is transferring over to the internet “we’re nowhere near supporting that scale yet,” Level 3 explained

“Long form video has never really been popular on the small screen,” Harris stated. He admitted that only his kids are willing to watch a feature film on a laptop, but wondered if that is something they will need to anticipate. The customer’s attention span and their tolerance of network problems and slowdowns are very separate thresholds. Quality of experience is more than just high resolution.

Afergan responded to Harris saying that the responsibility is not on the network side. Long format content requires an entirely different business model than the snack-sized clips that dominate the space currently, he explained. Afergan sees networks helping content providers build a new model and design a different user experience as more long-form content makes its way online.

Compton said the key to getting more downloadable long-form content viewed lies in joining the TV to the PC. When you can watch it on your 52″ TV you will see an explosion in long-form online content he said.

“How enjoyable is it to watch a show on a 15″ screen versus your 102″ projector, which I have,” Harris bragged quasi-facetiously. “Stop showing off!” Om admonished. Harris stressed that it will really be about connecting the biggest screen in each household to broadband. Is it IPTV or broadband? Harris asked this and wondered house this difference and separation will develop. Whoever winds up connecting that giant TV to the internet will “print money,” Harris predicts.

Comparing the successes and failures of Tivo, Compton thinks that service packages will be a viable model.

“I think there is a case to be made for open access to any content,” Ozgauc announced to a few cheers and whistles. “To provide unfettered access to content, let people watch whatever they want to watch wherever they want to watch it.” Ozguc hopes this model will be fueled by advertising as opposed to subscription fees.

“People are already voting with their remote controls,” Harris said. The future of television is moving away from a fixed timetable. Harris admits that Verizon is pushing a traditional model but also a separate “new” model. “So stop it. Give everyone a 50 megabit connection!” Om demanded, wanting immediate convergence.

“Wed like to see a lot more innovation,” Level 3 asked of his fellow panelists. “Our networks are growing faster than innovation.”

“There are many places where innovation can and should happen,” Afergan responded. “You don’t want to build the innovation in the core of internet. Let’s see it in helping connectivity to the home.” He liked the innovations he’s seen in video codecs and players, content management systems, and a variety of other consumer services and products.

Compton, admitting to not being a venture capitalist, couldn’t comment on where money is going in the network giant. “The R&D investment has risen over the years.” Compton said people are still trying to figure out where the value is going – is it going to the content makers, the network providers, system administrators, or who?

Ozguc cited his work with early HD delivery through AtomFilms back in 2004. He said it was “overkill,” saying that HD doesn’t really matter on a PC. “HD on a PC doesn’t make sense.” Compton wonders about the discussion of SD versus HD saying it’s much more of a continuum. Admitting there’s a definite trend to better quality, Compton doesn’t see the value in these exact resolution terms.

It can be a game of oneupmanship, Afergan smiled. Working with certain 700 or 1080 with the right architecture.
HD is just coming to me through a giant TV but it can come to me whenever and wherever one goes.

Harris kept bringing it back to the issue of the “destination screen.” It doesn’t matter, especially on a 17-inch laptop, that video is in true HD, he said. “if people are producing video you should be producing in HD. It doesn’t mean you have to deliver in HD.”

The audience asked: Will the capital spending be increasing by an order of magnitude or will it be the same rate as now?

We’re getting an extraordinary improvement for every dollar invested. We don’t expect that change any time soon. While we don’t think that all networks are equal we think that design is important and is it upgradeable.” “But now, we don’t think that’s a concern.”

“I will say this much, we are spending $28 billion between now and 2012 getting fiber all the way up to the house,” Harris boasted. He said that they are working on net-generation fiber to get terabit connections laid out and connected to homes. “Anyone with an aging infrastructure will have to upgrade.”

The audience asked about the issues of video formats.

Transcoding is incredibly important.” Managing multiple screens means that real-time transcoding is very important. Sliding up and down stream will allow for the delivery of the highest quality to any given device. The best model will involve taking in all original content in HD and spitting it out in the appropriate form in real time, Harris concluded.

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