Level 3 at the BBC

August 21st, 2008 by · 4 Comments

ThinkBroadband says that the BBC is switching from Akamai to Level 3 for streaming for its iPlayer offering.   Well, to be more accurate, they say that this information emerged from this blog post by Anthony Rose, head of BBC Digital Media Technology.  To be honest though, that conclusion is skimpy from the actual content of that post, there must be other information out there because it seems to have stirred up some controversy.

The article needs some clarification though.  The issue at stake is that Level 3 and Akamai have very different business models.  Akamai peers with thousands of ISPs for free, leaving servers at their facilities that hold cached data.  When an internet user views something on his iPlayer, if it comes from Akamai that data often comes from those local servers and bypasses the rest of the internet entirely, meaning that the user’s ISP doesn’t have to buy IP transit for that traffic.  It’s part of Akamai’s network design and the economic benefit to the ISP is one reason they have been so successful at it.  The internet backbones really hate it because it cuts into their market in a business that is already a very difficult one.  Level 3′s network design is quite different, it doesn’t have a widespread cloud of peered servers at thousands of ISPs, the cached content is in a datacenter somewhere and the ISP will see all that streaming data swell traffic on the IP transit connections it has to buy.  However, that does NOT mean that they have to pay Level 3 specifically for the extra traffic. They have to simply buy more IP transit from someone, it could be Level 3 or it could be from any other Tier-1 network that peers with them.

This situation would occur with other CDN providers, but to a lesser degree since all except AT&T will peer with ISPs wherever they can.  The entrance of Tier-1 carriers into the CDN space therefore has the potential to shift some costs around and there will be pain.  For Level 3 and AT&T, selling CDN services actually adds health to the overall IP transit markets by pulling traffic back off of the Akamai bypass, but those ISPs who have benefited won’t be happy because as buyers they like the IP transit market the way it is.

What recourse do the ISPs really have?  Why should the content provider have to worry about this?  They just want to distribute their traffic at the right price for the right quality.  It’s not their responsibility to check with all the various ISPs about their network design and who they peer with and who they don’t.  Well, in the case of the BBC, it is a quasi-governmental entity (i.e. I don’t really know the relationship), and therefore a bit more vulnerable to criticism.  But that’s local to the BBC, if the carriers make CDN inroads it seems quite clear that ISPs may face increasing costs and have no recourse.  Well, no recourse might be too strong, they could look to limit that traffic via deep packet inspection – but that would really get nasty.

Categories: Content Distribution · Internet Traffic

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4 Comments So Far


  • keys says:

    that does NOT mean that they have to pay Level 3 specifically for the extra traffic.

    there is a nuance : peering offers free traffic exchange for when the traffic is balanced, if not, peering can be done at a cost … the cogent peering dispute is a good example for that … the more traffic level3 manages the stronger position it has to cash in … so there is a good posibility to get money on the two ends for the traffic

  • Alfred J. Beljan says:

    when reading words like “that does NOT mean that they have to pay Level 3 specifically for the extra traffic” and “that does NOT mean that they have to pay Level 3 specifically for the extra traffic” plus “there is a good posibility to get money on the two ends for the traffic”

    I begin to wonder if CDN will actually be such a great money maker for our LVLT investment??

    there is a nuance : peering offers free traffic exchange for when the traffic is balanced, if not, peering can be done at a cost … the cogent peering dispute is a good example for that … the more traffic level3 manages the stronger position it has to cash in … so there is a good posibility to get money on the two ends for the traffic

    that does NOT mean that they have to pay Level 3 specifically for the extra traffic.

    there is a nuance : peering offers free traffic exchange for when the traffic is balanced, if not, peering can be done at a cost … the cogent peering dispute is a good example for that … the more traffic level3 manages the stronger position it has to cash in … so there is a good posibility to get money on the two ends for the traffic

  • morton dick says:

    LVLT had 7% rev growth in Q2 [qtr over qtr]——going from 77 to 83 mil .
    Could this be related to new BBC rev ?

    Morty

  • morton dick says:

    Previous post refers to EUROPEAN REV .

    Morty

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