The coming IPTV Interconnection Debacle

We've talked here before about how the 'old/POTS/Voice/Interconnection' model might offer a fit to the upcoming IP mess.  Now, there's extra reason to believe it.

In this week's Cringely column  (http://www.pbs.org/cringely/pulpit/2007/pulpit_20070202_001566.html), we learn that - like voice trunks - bandwidth is 'engineered' on the assumption that not everyone is on-line at the same time.  (And even if they are, they're staring at a screen a good portion of the time --- not actively downloading something.) That's the same premise as voice, of course --- no telephone switch in the world is equipped to let every user make a call at the same time.

His quote:

"While you may think your 1.5-megabit-per-second DSL service or your 3-megabit-per-second cable modem service is actually backed by 1.5 megabits or 3 megabits of Internet bandwidth, they really aren't. ISPs provision backbone access based on the expectation that people usually aren't on the Internet, and even when they are on the Internet most of their time is spent reading the screen, not actively sending or receiving packets. As such, ISPs have been able to get away with buying 20-30 KILOBITS per second of Internet backbone capacity for every MEGABIT per second of Internet service they are selling at retail. This 20-to-1 provisioning ratio of what's sold to what is promised (and believe me, 20-to-1 is me being generous to the ISPs since it is probably much higher than that) is what creates the burgeoning Internet video problem."

All of this means that newer services, such as IPTV, can only be implemented by improving on the 20-to-1 ratio.   And that costs money --- big money coming out of the ISP's pockets.  When you think about it, this is a pretty good reason for the ISP's wanting to bust up the net neutrality argument.  

So, we stick by our long-standing prediction that a new metric will emerge (similar to originating and terminating minutes in the POTS world) that will adequately spread the cost of provisioning these facilities on an intercarrier basis.  It won't be long before we see a "Missoula Plan" for Video over IP.  (http://policycouncil.nationaljournal.com/NR/rdonlyres/91E0BD63-F543-4F0D-AB00-7BBDD3E1BB7D/36101/060719251MissoulaPlan1.pdf)