AT&T Plans Content Distribution Changes
dailynews.yahoo.com
Monday July 17 10:15 PM EDT
By Max Smetannikov, Inter@ctive Week
AT&T's pledge last week to build the highest-capacity content distribution network in the market in the next 18 to 24 months could bring about massive changes to one of the Internet's hottest technology segments.
Content peering could become a reality, as content distribution market leaders such as Akamai Technologies and Digital Island see a tidal wave of competition rising from AT&T and other network operators.
AT&T said that it will spend $200 million on the build-out and that, when completed, its content distribution network will support 10 million simultaneous views of broadcast events. Digital Island is upgrading its capacity to handle 7.5 million simultaneous views. Akamai doesn't publish numbers, but market observers said that its network capacity keeps pace with Digital Island's.
Large carriers such as AT&T are waking up to the content distribution market, and analysts believe that it's only a matter of time before they find a way to peer their content networks in the same way they peer bandwidth. As a result, a coalition of peered networks could "own" just as many eyeballs as the network-independent content distributors that control this market. The number of eyeballs reached is crucial to content providers like CNN, because they operate in the world of ratings and click-throughs.
In a typical content distribution setup, an independent operator sets up servers that optimize content delivery through mathematical algorithms at several Internet service providers' locations for free, in exchange for ISP customers getting better service on Web sites with content distribution capabilities. Since the independent operator doesn't own a network, no additional pipes are connected to the ISP's location.
In the case of a carrier-based distribution scheme - such as those offered by Cable & Wireless, Enron Broadband Services and Exodus Communications - content is sent through either the carrier's own content distribution system, or Akamai's or Digital Island's system under reseller agreements.
But Peter Christy, director and senior analyst at Jupiter Communications, believes that the peering schemes of either network-based operators or small, independent content distributors could change the economics of content distribution. By linking their systems, the smallest independents could have the same kind of reach as Akamai or Digital Island. Meanwhile, if all of the carriers that buy content distribution equipment suddenly join forces, non-network-based content providers might not have any choice but to rewrite their reseller agreements into peering contracts.
With AT&T leading the peering charge, many analysts believe such an arrangement will soon be the norm. "There is a lot of discussion about content distribution networks peering with each other, but there is no technical solution to do it at this point," said Pat Greer, director of content delivery at Digital Island.
AT&T, however, seems undeterred. "The next generation of peering will start to look at things like content peering services and other ways of getting traffic to and from other providers," said Rose Klinovich, director of global Internet Protocol services at AT&T. "I think the underlying bandwidth is still the key, and we are leveraging what is in place today - private peering relationships."
But some worry about large-carrier peering networks. "There will be a select group of large providers that would pretty much dictate policy," said Greg Howard, principal analyst at The HTRC Group.
Individually, though, content distributors are preparing technological platforms that will one day enable them to peer, in case an alliance with the likes of AT&T becomes inevitable.
Digital Island will announce next week its intent to deploy a media bridge technology from FastForward Networks that would enable Digital Island to exchange content with other networks that might deploy this platform. Executives at FastForward believe such contracts are possible because FastForward's technology is unique in allowing operators of large streaming networks - such as the ones AT&T and Digital Island are building - to program the networks on the fly. |
