Quelle: screenshot The following analysis was originally published on EBU’s EBUZZ platform in May 2013, shortly after German Telekom announced plans to end unlimited flatrates on DSL. Thus goaded, I started to think about possible relations and consequences for public service broadcasters – and their audience….
It stirred some discussion and activities within the broadcasting community. But unfortunately, the article is no longer available on the net, as EBU apparently has a fairly short MDD (minimum durability date) for reasons whatsoever. Therefore I put it up here again. Eventhough I amended and marked some things to make it clear: This is 2013! – please consider it being „historic“ in many other respects, too – evenmore in the light of the recent decision of European Parliament to enable an internet, with rules, that…
„….will threaten innovation, free speech and privacy, and compromise Europe’s ability to lead in the digital economy“ (Tim Berners-Lee)
Paradigm shift – the end of flat rates as we knew them?
Facts and considerations for broadcasters.
Since April 22nd (2013), a discussion develops in Germany, when ISP Telekom declared that starting in May new DSL contracts will contain speed limits. So if new customers in the slowest category „up to 16Mbit/s“ reach a maximum of 75 GB transfer volume, they will have to cope with 384kbit/s until the end of the month – unless they are willing to pay extra. The limits lift up to 400GB/month for the few ones having a „up to 200Mbit/s“ contract, according to the press release.
So this sounds brutal? Well, protests arise, calling this ‘an attack on the free, unlimited and equal internet’. At the moment this is still nothing more than an announcement, or call it a reprieve, as Telekom declares, that technical implementation will not be completed before 2016. Nevertheless, this move can be seen as evidence of a paradigm shift with far reaching consequences for broadcasters, challenging their digital strategies.
Telekom (2013) CEO René Obermann got upset last autumn during the opening panel at the Medientage München. Addressing Google’s YouTube and others he demanded, that content providers causing heavy traffic on the net must contribute to the costs of infrastructure expansion. 300 billion Euros will be necessary within the next years in order to make infrastructure fit for rising demands of bandwidth.
Quelle: screenshotClick here for René Obermann’s announcement at Medientage 2012 (use subtitle for English translation)
Significantly enough the motto of Medientage 2012 was: At the Crossroads. The new Rules in the World of Media. And indeed, it seems that new rules are presently about to be defined.
Tough facts and challenging forecasts
Telekom as all other ISPs are startled by predictions on the future data consumption. The most prominent and probably comprehensive one is Cisco’s Visual Networking Index. The recent edition was published in May 2012. It highlights many tough facts:
- Worldwide IP traffic will rise from 30,000 Exabyte/month in 2011 to 110,000 Exabyte/month in 2016
- IP traffic in Western Europe will reach 24.4 Exabytes/ month by 2016, from 7,000 Exabytes/month in 2011
- Video-on-demand traffic will triple by 2016 – and constitute 55% of all consumer internet traffic – up from 51% in 2011 (but for the real extent set this into relation to the total of 110,000 Exabytes/month!)
- Between 2011 and 2016 IP traffic to TVs, tablets and smartphones will rise with CAGRs (compound annual growth rates) of 42%, 116% and 82% respectively. (2013)
To most of us, these exa-terrestric numbers are unconceivable. And of course, it’s part of a network infrastructure provider like Cisco to animate business with great sounding predictions. Sandvine, a networking equipment company and specialist for deep packet inspection issued comparably similar results last November in their Global Internet Phenomena Report: Accordingly, in the US 65% of data traffic are already due to audio and video streaming. Customers of IPTV provider Netflix cause one third of the whole of the fixed network traffic at peak. Average monthly data consumption went up 120% from 23GB to 51GB within one year.
For Germany, a distinctly lower average of around 20 GB/month per subscriber is mentioned by Telekom presently, but CAGR between 33% to 50% are expected, too. So, hitting 75 GB/month isn’t that far away for a vast majority of customers. In addition, Telekom argues, that already 3% of customers today cause 30% of traffic, consuming up x20 of the average.
Some more observations might add to the picture: Germany’s Federal Association for Information Technology, Telecommunications and New Media BITKOM states that 82% of German households are now connected to fixed high speed internet. As growth rates went down to less 1 million new customers during the last two years, market saturation seems to be reached. Claims are staked, the price war is over. So economically speaking, it’s time to monetize infected habits and cash up from the addicts.
More than 50% of German household are subscribed to “the best of all networks” (Telekom slogan). Vodafone/Arcor as biggest competitor ranges at 10%, the rest is fragmented. But most of them do have to squeeze in for ‘the last mile” on Telekom’s copper wire telephones lines. With 0.5% equalling 220,000 households, fibre technology in Germany does not yet matter, according to the FTTH Annual Report 2012. Along with only the UK, Germany is dramatically lagging behind all other European countries. And Telekom is in fierce criticism, to rely upon vectoring, considered a mere transition technology, instead of pushing forward to fibre channel.
Although Kabel Deutschland and Unity Media as major operators of the German TV cable network are comparatively small players, reaching each 6 to 8% market share. So they promote aggressively high speed access, spamming mailboxes weekly.
But regardless DSL, VDSL or fibre channel, the reality of broadband dissemination in many cases is unsatisfactory at the end of the line. Apart from vast rural areas, even part of suburban areas around big cities like Munich are still cut off from high speed internet.
Quelle: screenshot(2013) Snapshot of areas with availability of more than 16 MB/s around Munich from the official Broadband Map of German Ministry of Economics BMWi
A recent report of the Federal Network Agency Bundesnetzagentur confirmed, that having a slow internet fixed connection is not just ‘a feeling’ (press release in English). 226.000 users participated in a reality-check online measurement. Results: One third of customers receive only up to 50% of the maximum speed stated in their tariff scheme. But actually only 20% get the bandwidth they think they pay for.
As far as mobile internet is concerned, anyone living in the surroundings of a European major city and commuting makes probably this experience: Internet on the tube or railway goes down on its knees daily. It might be okay for checking E-mails or Twitter, but surfing is a drag. Not to mention listening or watching anything on a media app – even if your company has provided you with a generous volume tariff. But here it’s pretty clear that there the ratio volume/speed is cemented. So exercises in castigation will persist for a long time.
So indeed, in terms of broadband Germany must be considered a developping country in a state of confusion. Due to the usual reasons: Nobody feels responsible, nobody takes action, everybody acuses the other party. So ist goes ping-pong between politics and telco industry.Sascha Lobo, one of the most prominent bloggers called this the “Hour of the Broadband Stupi-trers” (stupid interpreters): take the facts, twist and turn until you blur the truth without telling lies.
Internet at the crossroads: net neutrality?
But of course, Telekom’s threat to strangle the internet does customers scare off to sign. Therefore, in the new schemes all data transfer resulting from using their own IPTV platform Entertain is excluded from volume limits (as well as those resulting from WLAN TO GO, an effort to enhance wireless access point coverage). According scheme packages were launched alongside the announcement. In support, Telekom argues that Entertain is a ‘managed service’, approved by German media authorities. Despite that, German Federal Network Agency Bundesnetzagentur announced to scrutinize the new model.
On the European level, this revives the almost forgotten controversy on net neutrality. The concept initially proposed in 2003 by Tim Wu, a professor at Columbia Law School, incited a vital but still open debate in the US. In a nutshell, net neutrality states that all data has to be treated equally by ISPs – regardless content or format, the platform it derives from and the user demanding it. Or as Tim Berners-Lee put it once in one of his blog posts.
If I pay to connect to the Net with a certain quality of service, and you pay to connect with that or greater quality of service, then we can communicate at that level. That’s all. It’s up to the ISPs to make sure they interoperate so that that happens.
Quelle: screenshot(2013) status of netneutrality accorind to Netneutralitymap.org
The discussion about net neutrality covers numerous aspects and principles, and touches technological, economic, social and political issues. The most significant one of course being governmental control, restriction and censorship. Other economic interests more and more come in as telecommunication companies and ISPs expand their business models by establishing own content services, joining up with media partners or acquiring start ups.
At present (2013)two European countries – Norway and the Netherlands – have already made first steps to adopted laws or agreements on net neutrality. In the UK, last July, a majority of ten ISPs agreed upon a voluntary code of practice, three others opted out. Whereas in France, early 2013 ISP Free limited access to YouTube for French customers until governmental intervention, and meanwhile Orange declared, that they had forced Google into paying them for traffic. The Germany regulatory office Bundesnetzagentur started a net neutrality survey in March. Similar to the preceding speed evaluation, until the end of June customers can check if their ISP does filter, delay or omit any services or data. After all, the European Commission is in a process of ‘public consultation’ since July 2012, as part of their Digital Agenda for Europe. Recently, the European consumer organization BEUC and European Digital Rights initiative EDRI addressed the European Commission anew in a joint letter “to take action to restore and protect the principles of openness and neutrality of the Internet in Europe”.
Apart from efforts for setting a political and economic framework, taken down to the bits and bytes, the discussion hits the deep packet inspection technology. Initially invented for security management and to ensure user services, as well as to trace and fight piracy on peer-to-peer and bit-torrent networks, it is more and more regarded controversial and as a fundamental threat not just for net neutrality but also the general notion of a free, democracy serving internet. Clearly: Deep packet inspection is the core technology to sepereate what’s going through the network – or not.
Political action is to be expected, as ITU in December 2012 during the Dubai WCIT endorsed Y.2770 “Requirements for deep packet inspection in Next Generation Networks”. Privacy and public rights interest groups and experts regard this recommendation critical, as it “…could give governments and companies the ability to sift through all of an Internet user’s traffic – including emails, banking transactions, and voice calls – without adequate privacy safeguards.”, as the Center for Democracy & Technology put it. Domesticating technical possibilities and pouring it into legislative measures is up to the different governments and still pending.
Changing habits to the reverse?
Undoubtedly the success story of the internet is due to introducing DSL and the all-you-can-take-flatrates around the millennium. Only and just then the internet became a convenient commodity. Before that, surfing meant pure stress.
Anyone, who can recall the times before that knows what I’m talking about. For the rest of you, a quick recap: First take a decision, when you can risk to block one, or even the only one of your telephone lines; then dialling-up – preferably your provider offered a local number; hoping there’s a free modem port on the other end of the line, praying that both modems handshake a stable connection; retry several times, until final success. And then always having an eye on both the connection window about ‘throughput’ and – even more important – ‘time elapsed’. Why? Because you used to be charged twice: from the telephone company – time and probably even distance – and your ISP – CompuServe, AOL, T-online… you name it. But in any case: Go berserk without jumping out of the window when connection breaks down during running an upload (i.e. a report from NAB in Las Vegas, just produced on a laptop in a hotel room on 15th floor. The 3 MB mp3 file took 45 minutes to get to BR in Munich).Or like this.
- Before flatrates: Time was money. Speed was low. Amount didn’t matter – yet it did mean time and therefore money.
- With flatrates: Time didn’t matter. Speed was high (well, sort of). Amount: all you can take (interestingly enough still with time factor).
- After flatrates: Times – matters if you hit the limit and don’t want to pay to speed up until month’s end. Speed – matters for the same reasons. Amount – even, too.
Concerns for broadcasters
Of course, classical broadcasting will be – and has to play – a major role for getting content and services across to the public. But undoubtedly the importance of the internet will rise. Acknowledging this, all broadcasters embark their media strategy around this prediction and pursue a ‘hybrid way’.Mobile will become increasingly important. But for many usages fixed internet connections and affiliated WLAN will remain the backbone.
So let’s look and some key questions on the issue:
- Will other ISPs join in and set up similar schemes?
- Maybe not tomorrow, but the question is how long they can profit from selling ‘unlimited internet’, without hitting their ceiling?.
- Are terms and conditions of existing contracts under threat to be altered?
- Good question! At the moment Telekom denies. But if I take a look into my account, I see that the booked tariff shows a date for ‘end of contract’ I can’t remember having seen before (wasn’t it that a scheme was book “until alteration?) So this, in fact, gives the ISP possibilties to alter terms & conditions…and introducing a volume limit.
- How does this affect a digital media strategy?
- Regarding today a minimum limit of 75 GB per month and assuming a 50/50 ratio between media consumption and other usage: with a maximum of 10 full length programmes a month requested directly from broadcasters media library, the quota might be exceeded. Well that’s not very much….
So if the discussion on counting or not counting traffic from ISP proprietary media portals remains unsolved, customers likely will move over to use programme from the ISP portal instead, saving up on on his volume limits.
- Are broadcasters really happy, if content more and more gets embedded in third party platforms? Do they really want, that traffic is taken away from their own sites?
- Answer yourself!
- What could this mean for developping new services?
- It’s not unlikely that if net neutrality remains unsecured, that pretty soon certain internet services on some networks might not be accessible – whereas others will be promoted.
At present: This is already true for HbbTV. This standard, supported by the majority of European public service and commercial broadcasters, as well the consumer electronic industry, is not available on Telekom Entertain (instead, Telekom states that they want to offer ‘a better solution”.)
For the future: This threatens not just the developmentof new broadcast-savvy services, as their introduction can become more complicated not only by economic interests, but even by the difficulty to pass technical gate-keepers, that set up customs posts.
- What’ on the horizon?
- On the darkest of all horizons you can envision ISPs becoming sort of ‘cable providers’, trying to make broadcasters (or anybody) pay for distributing their content. Meanwhile gaining and analizing valuable market data, developping business, determining the technical development…Sitting right in the middle between producers and customers..
- Why should broadcastere take up the issue and position themselves now?
- Consider, that the right to internet access is considered a fundamental right.
Then think about the relation of public service and net neutrality.
Admittedly, there is a dilemma between the need to invest into the expansion of infrastructure and the notion, that the internet pouring out of the tap like fresh water. But right now, on the day exactly 20 years after the World Wide Web went public and has long become a commodity the basic principles have to be ensured day by day.
More Links on the issues:
- Net neutrality in Europe
- Wikipedia: Right_to_Internet_access
- WIRED-2011-03-06: U.N. Report Declares Internet Access a Human Right
- UN-General Assembly – 2011-05-16: Report of the Special Rapporteur on the promotion and protection of the right to freedom of opinion and expression
- BBC-2010-03-08: Internet access is ‚a fundamental right