[IP] Phone, Cable Firms Rein In Consumers' Internet Use
Begin forwarded message:
From: Dewayne Hendricks <dewayne@xxxxxxxxxxxxx>
Date: October 22, 2005 12:29:57 PM EDT
To: Dewayne-Net Technology List <dewayne-net@xxxxxxxxxxxxx>
Subject: [Dewayne-Net] Phone, Cable Firms Rein In Consumers' Internet
Use
Reply-To: dewayne@xxxxxxxxxxxxx
[Note: The tyranny of the bandwidth police is now with us. Not an
unexpected development. I guess that as long as we all keep sending
the equivalent of 'morse code' over their networks, the carriers will
be happy. Here's a pointer to friend Esme Vos take on this article:
<http://muniwireless.com/applications/875>. DLH]
Phone, Cable Firms Rein In Consumers' Internet Use
Big Operators See Threat To Service as Web Calls, Videos Clog Up
Networks
By PETER GRANT and JESSE DRUCKER
Staff Reporters of THE WALL STREET JOURNAL
October 21, 2005; Page A1
Several large telephone and cable companies are starting to make it
harder for consumers to use the Internet for phone calls or swapping
video files.
Some of the companies say the users are hogging bandwidth, taking up
too much space on networks and slowing down service for all customers
that tap the Internet for email, video, music, phone and other services.
Wireless phone companies like Verizon Wireless and Vodafone Group PLC
stipulate in their subscription contracts that customers can't use
the company's high-speed Web-access networks for Internet calling --
or may prohibit usage in the future. Several cable companies are
using technology to cap the speed at which some of their customers
can swap videos. A number of equipment companies are selling software
and other products designed to block and monitor Internet
applications such as phone calls, video and photo downloads.
Many telephone and cable companies have begun to closely monitor the
uses of their network with an eye toward controlling activity by
users who are swapping movies, TV programs, pornography and other
video files. Operators say file sharing is growing so quickly, it
threatens to sharply slow down other uses.
In August alone, one cable broadband subscriber consumed a total of
1.5 terabytes, the equivalent of 1,500 standard-definition movies,
according to CableLabs, the cable industry's research and development
arm. Fewer than 10% of the subscribers of Time Warner Inc.'s cable
unit consume more than 75% of its bandwidth, says Mike Lajoie, chief
technology officer of Time Warner Cable. "It can be frustrating for
people using email or sending pictures to their moms," he says. "It
tends to slow down the rest of the network."
Critics say the big operators are using their concerns about heavy
network traffic to fight competition from smaller rivals that are
using the phone and cable companies' networks, like Internet calling
companies Skype Technologies SA or Vonage Holdings Corp. Others say
that telecom companies may use their control over the networks to
charge users more money if they want higher quality.
"They claim it's a network-management issue when it's really a
revenue-maximization issue," says Mark Cooper, research director for
the Consumer Federation of America.
The battle features big companies with multibillion-dollar telephone,
cable and cellular networks into homes and tiny competitors who don't
own any network but whose low-cost or free services compete with
those of the big operators. Consumers could get caught in the squeeze.
The crackdown is controversial: Consumers have come to expect
unfettered use of the Internet. Any effort by phone or cable
companies to curtail use so far has sparked an outcry.
Kevin Martin, chairman of the Federal Communications Commission, has
said that market forces would prevent operators from curtailing
applications that run on their networks, but he also says the FCC is
looking into guidelines to protect consumers on this issue. Earlier
this year, telecom provider Madison River Communications stopped
blocking Vonage's service after the FCC intervened.
While there aren't yet specific laws to enforce so-called net
neutrality, an FCC spokesman said the commission relied on its broad
authority "to ensure an efficient communications network at
reasonable charges" in its action on Madison River earlier this year.
He declined to comment on Verizon Wireless's contract language
prohibiting Internet calling. "It would involve looking at the facts
of the situation." Verizon Wireless is a joint venture between
Verizon Communications Inc. and Vodafone.
The big operators' efforts at Internet traffic control reflect, in
part, the skyrocketing use of video files and other bandwidth-
intensive applications by the tens of millions of households with
high-speed Internet connections. Video file sharing can use up more
than 20 times as many bits as other Internet applications, such as
making a phone call.
One kind of video-file-sharing software alone, called BitTorrent,
accounted for 18% of Internet traffic on U.S. cable operators'
networks this year, according to a recent CableLabs survey. "These
applications, run unchecked, could consume all of the bandwidth
available in the network," says Ralph Brown, CableLabs' chief
technology officer.
The increasing attention being placed on broadband traffic control
promises to be a boon for network-gear businesses like Ellacoya
Networks Inc., Sandvine Inc. and P-Cube, which was acquired by Cisco
Systems Inc. last year for $200 million. Some of these companies have
developed a technology called "deep packet inspection" that enables
network operators to tell whether bits on their network are email,
videos, music, photos or any other use.
The use of such policing technologies by big operators is also driven
by the popularity of competing Internet-calling services like those
of Skype and Vonage. Those companies offer customers the ability to
make free or cheap calls using their high-speed Internet connection
without paying a telephone company for traditional voice service.
Last month, Skype, which has 55 million registered users world-wide,
was acquired by eBay Inc. for $2.6 billion.
Verso Technologies Inc. last month launched its "Skype Filtering
Technology," marketing it to carriers seeking to block the use of
Skype and other such services. "I can guarantee you that if a service
provider has the ability to prioritize their voice traffic over Skype
traffic, they'll do theirs," a Verso executive said.
Verizon Wireless's BroadbandAccess enables customers to use its
cellular network for high-speed Internet access. But the service
explicitly prohibits subscribers from using it for Internet calling
because "we don't want people clogging up the network," says
spokesman Jim Gerace. The carrier launched the service in two markets
in 2003, but has only recently begun heavily marketing the offering,
cutting prices by 25%.
Mr. Gerace adds that Verizon Wireless has to bear the cost of any
dissatisfaction with an Internet-calling provider. "We offer a
wireless connection. When it doesn't work well, who do they call?
They don't call Skype; they call us," he said.
A Vodafone spokesman said the company's contract language, which
applies only to its customers in Germany, was included as "a legal
reservation" for potential future action. He said the carrier isn't
blocking Internet calling and accepts that such a service is a
competitor.
Time Warner Cable is considering several ways of controlling the
traffic on its network, Mr. Lajoie says. The operator might simply
give video file-sharing traffic a lower priority than other traffic
so that it slows down first during periods of peak usage. Or it might
restrict the flow of bits to a particular user's computer if the
usage is too heavy. Time Warner Cable may also charge heavy users
more if they want preferred treatment. "Revenue
opportunities...definitely exist," Mr. Lajoie says.
Phone companies also may take such steps for their land-line
broadband networks. Verizon Communications, for example, has put
tools in place for monitoring the network, and managing it if
necessary, says spokesman Eric Rabe. "We don't feel at this point
[video file sharing] has caused the kind of problem that would force
us to take extraordinary measures," he says. "But we're prepared to
deal with it if we need to."
Telecom companies overseas have been more aggressive than those in
the U.S. in controlling their networks. Verso says that interest in
its service so far has come primarily from overseas carriers, since
deploying such a technology here in the U.S. would be highly
controversial. The only carrier it would name is Britain's Cable &
Wireless PLC, which it says is interested in deploying the technology
in its Caribbean markets. Cable & Wireless didn't respond to requests
for comment.
Shaw Communications Inc., a large Canadian cable operator, has been
using technology purchased from Ellacoya to manage its broadband
network for about one year, says Shaw's president, Peter Bissonnette.
During some periods of peak usage, video file-sharing traffic is
slowed to provide more bandwidth for subscribers accessing email, Web
pages and other uses. "We try to manage those people who are
avariciously using up spectrum," he says.
Shaw also uses the network management technology to increase revenue.
For example, customers who use Vonage or another Internet phone
service can pay an additional $9.95 a month to make sure that their
calls get higher priority on the network than some other uses.
Businesses that sell services that piggy-back on cable and phone
networks have been watching efforts by operators to control traffic
with alarm. "To use a broadband connection for any legal application
is critical to ensuring the vitality of the Internet," says Brooke
Schulz, a Vonage spokeswoman.
Ashwin Navin, chief operating officer of BitTorrent, said he is "very
disappointed" that operators are taking steps to slow down video file-
sharing traffic. He says that he's mostly hearing about it happening
in markets served by only one operator, depriving disgruntled
consumers of a choice.
Write to Peter Grant at peter.grant@xxxxxxx and Jesse Drucker at
jesse.drucker@xxxxxxx
URL for this article:
<http://online.wsj.com/article/SB112985651806475197.html>
Weblog at: <http://weblog.warpspeed.com>
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