More ISPs Managing Broadband Networks, Sandvine CEO Says
More ISPs in North America and abroad, including cable operators, are using network management to deal with the increased potential for congestion as they increase speeds, said the head of a major vendor of equipment for the purpose. The FCC’s finding against Comcast’s treatment of BitTorrent traffic (CD Aug 4 p1) helped thaw the market for network management gear, said Sandvine CEO Dave Caputo. “The FCC order lifted the cloud of uncertainty” over ISPs, he said in an interview Thursday at the NCTA show.
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“Because of the confusion and lack of clarity around network neutrality and what Comcast and us went through … the business froze up in 2008,” but it’s rebounding this year, Caputo said. Comcast has “historically” been Sandvine’s biggest customer, he said. “Comcast has a pretty righteous position from the perspective of, they want to improve the quality of the experience for their subscribers” and will slow the access of customers hogging capacity, Caputo said. “Most people would see that as a fair approach.” A Comcast spokeswoman didn’t reply to messages seeking comment.
Free Press, which filed the complaint to the FCC against Comcast, said ISPs shouldn’t get to decide which applications take priority. But the group had some praise for the company. “Creating fast and slow lanes for Internet applications -- even as a response to congestion -- is harmful to consumers and to innovation,” said Chris Riley, the group’s policy counsel. “We do not feel that the Internet service provider is in a position to choose, for their users and without their users’ direct input, which applications need priority.”
But Riley noted that a recent report by Free Press applauded Comcast’s approach “as an example of a nondiscriminatory network management regime” that, if “properly implemented,” is reasonable. “Comcast’s system looks only at high-volume users in congested neighborhoods.” The former general counsel of Free Press who filed the complaint against Comcast recently said it has been much more open (CD March 3 p2) since the FCC order.
ISPs “all had a bit of an education” from the commission’s August order, said Caputo. The message is to “make sure you're very clear, keep it very simple, the way you communicate” with subscribers about network management, he said. “The upside of the happenings of last year is that there was a big open frank discussion on fairness and how to manage networks” which “played a big role in educating people.”
For Sandvine, 2008 “was a disaster” financially, as cable customers shied away from buying gear because of the FCC investigation, Caputo said. That led to a $20 million loss, reversing a profit of about the same amount in 2007, as sales slipped 29 percent to about $50 million. “It was a nightmare year,” he said. On the flip side, “where we used to get the vast majority of our revenue from North American cable, we're considerably more diversified” now, Caputo said: The company also manages DSL, fiber-to-the home and wireless networks.
“The momentum in this industry has never been stronger,” Caputo said of cable operators. Besides Comcast, Sandvine counts as customers 11 of the other 15 largest cable operators in North America, he said. Caputo declined to identify them. “Everybody is understanding the idea that the network has to be more intelligent, that all packets are not created equal, there are packets that are latency and jitter sensitive and there’s traffic that’s just bulky,” he said. “You and I could care less whether an e-mail arrives 200 milliseconds one way or the other. But you and I immediately notice if our phone call is delayed 200 milliseconds, because we'd be stepping on each other.”