Study Predicts Internet Users Face Bandwidth Drought - Page 3
"Service provider revenues are stagnating because broadband penetration [is reaching a saturation point]. So the model of upgrading the network will change," said Medikonda. "They will depend on the revenue sharing business model, and the network architecture will change from building a big, all-you-can-eat network to a network that has two different attributes - identity management, and policy and control," he added. The revenue-sharing model to date has been used by Google and Yahoo, which have paid partners such as AOL, Earthlink and others as a channel to get to the end subscriber. Google for example, generated gross revenues of $3.6 billion in its first calendar quarter of 2007, but paid out $1.1 billion to thousands of partners such as AOL, Ask Jeeves, Earthlink and HowStuffWorks.Juniper, of course, has created federated identity management techniques that allow the network to identify the user and then use a policy and control system to create policies on demand based on the applications the user is accessing. "If a video on demand provider wants a greater experience to the user, it can signal to the policy and control system and on demand it changes the bandwidth for the particular session to create a better user experience," described. Both Juniper and rival Cisco agree that more intelligence is needed in the network to apply Quality of Service control to latency-sensitive applications, and Medikonda asserted that "identity management is the next wave of investment service providers are looking at." But Burton Group's Passmore believes that such an approach is more costly than just increasing the size of the network pipe. "It's cheaper to deploy more bandwidth than to turn on QOS and violate net neutrality. Forty percent of the cost of your phone bill is the phone bill. What that says is going to a flat rate and throwing bandwidth at the problem is much more effective than trying to meter things."
In that model the key partners missing are the service providers such as AT&T, British Telecom and others. Those providers, Medikonda predicted, "will squeeze companies like Google in the revenue-sharing supply chain, because in the next three to five years the Internet will get to a congested mode where companies like Google [will help to fund network upgrades] so the end user won't have a bad experience."