IDC Says Broadband Providers Will Win with Net Neutrality
Friday, 29 June 2007
IDC predicts regulation around net neutrality will be decided in favor of facilities-based broadband providers like AT&T, Verizon, and Comcast. However, unlike most observers, IDC believes that keeping the Internet free from net neutrality regulation will ultimately benefit large scale Internet incumbents like Google, eBay, and Amazon - the very companies leading the charge against net neutrality regulation.
Core to the net neutrality debate is the issue of control and monetization of broadband networks by facilities-based broadband providers. Led by an explosion in Internet video, IDC forecasts that the US consumer Internet generated IP traffic is going to be three times heavier in 2011 than it is today. The magnitude of this growth of IP traffic signals an obvious and critical need for broadband network upgrades. IDC says aggressive versions of net neutrality regulation would have a dampening effect on this upgrading effort as facilities-based providers would be prevented from architecting their networks to offer new services that require higher speeds or quality of service (QoS).
In IDC's opinion, net neutrality proponents like Google will realize that quality of service (QoS) is essential to the delivery of new services and quietly modify their position and join the network prioritization environment they now oppose. "Google will likely maintain a public-facing resistance to network control in the short term, but should be making behind the scenes plans to act quickly when the matter is settled and the opportunity materializes," advises Matt Davis, program director of IDC's Consumer Multiplay Services program. "Being caught flat-footed when a game-changing development occurs makes disruption from smaller, hungrier players willing to deal with facilities-based providers much more likely."
This IDC study, US Consumer Internet Traffic Forecast 2007-2011: The Impact of Net Neutrality on Service Provider Infrastructure Investment (IDC #207177), examines Net Neutrality with a focus on issues surrounding potential broadband infrastructure investment. IDC measures the categories and volume of Internet-generated traffic traveling over US operator access networks in detail. The analysis uses data gathered from real world deployments of broadband using deep packet inspection technology that resides in networks representing over 5 million US broadband users.
This data allows IDC to estimate both the volume and type of traffic that currently travels over broadband networks. IDC uses analysis generated by experts in VoIP, video streaming, email and other applications to forecast our expectations of growth in Internet traffic over the next five years. This analysis is placed in the overall context of the impact of the debate surrounding Net Neutrality.