Yesterday, Verizon announced its new content distribution strategy, using Velocix caching solutions and focusing on delivery to their own customers more so than the rest of the internet. And yet, the more I think about it, the more I think this is less about the CDN business than it is about the other elephant in the room: net neutrality.
Net neutrality or the lack thereof has been a raging debate for a while now, but it has always boiled down to this: last mile providers want to get content providers to pay for preferential delivery over their networks, and content owners say that means blocking access. Think about Verizon's CDN offering for a moment. They are offering content owners faster (i.e. preferential) delivery of video content to their own FIOS and DSL customers, and those content owners can't buy it anywhere else. Other network operators and CDNs will always be a tad slower. They may call it a different thing, but the effect is the same.
Verizon doesn't need to shape traffic, they don't need to inspect with anyone's packets, or man any toll booths on the great and free internet-as-we-know-it. They just put in an express lane and called it a CDN, and voila - tiered service to the last mile. And the scary thing is, they're right, this is entirely legit, even if it isn't a CDN in the sense of an Akamai or Limelight or even network operator Level 3. But of course, Verizon didn't mention the phrase 'net neutrality' anywhere in its announcement, and most people don't think of CDNs and net neutrality in the same sentence.
How it will work out economically though is unclear. Do those extra ten milliseconds of latency really make a difference to someone watching a two hour streaming video?
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