WHEN Niklas Zennström and Janus Friis announce a new venture, the world takes notice. As the duo behind KaZaA, a file-sharing network that was widely used to trade music, and Skype, a free internet-phone service, they have already shaken up the music and telecoms industries. So when they took the wraps off their latest project, a television-over-internet service called Joost, it looked as though the television industry might be the next to suffer. Yet rather than adopting the defensive stance that has often characterised traditional media's response to new technology, the likes of Sony, Viacom and Turner Broadcasting have signed deals with Joost to provide the service with content.
As a result it is the rather less glamorous internet-service providers (ISPs) that are having sleepless nights. Fredrik de Wahl, Joost's boss, says software companies have been waiting for the internet's infrastructure to reach sufficient "maturity" before trying to pipe full-screen television over the patchwork of technologies that are used to deliver broadband to homes. Joost uses a proprietary peer-to-peer (P2P) protocol that pipes data to viewers at a rate of 350 megabytes per hour. But networks are now up to the job, and Joost is expecting to amass millions of users, if not tens of millions, within the year. "It is a bandwidth-intensive product, that much is obvious," says Mr de Wahl. ISPs, he says, should be "aware and prepared".
Some of the companies that run the telecoms networks over which Joost and other bandwidth-hungry services hope to run are less confident that the internet's foundations are ready to bear the strain. Concern over the internet's ability to handle large amounts of video has opened a niche for companies that offer guaranteed network links that run alongside, but separately from, the internet. PacketExchange, for example, trumpets its service as a "faster, safer and more reliable alternative to the public internet". Worries about overtaxed networks are also prompting outright bans on internet video. America's armed forces recently began blocking access to video services such as YouTube and MySpace from their internal networks, because of bandwidth limitations at their internet gateway.
ISPs are particularly worried. P2P applications such as Joost are used by less than 5% of a typical ISP's subscriber base, but they account for over half the total traffic. Comcast, an American cable operator, has been criticised for cutting off intensive P2P-using "bandwidth hogs", even though it refuses to specify exactly what it regards as acceptable usage limits.
Many ISPs have taken the less drastic measure of "throttling" the download speeds available to their heaviest users at peak times, which are between 4pm and midnight—in other words, prime-time for television. Virgin Media, a British ISP that recently introduced throttling, offers a maximum download speed of 20 megabits per second, but this is reduced once a three-gigabyte limit has been exceeded. If the connection is running at full capacity, that will take 20 minutes.
If Joost and other P2P video services become popular, they may prompt ISPs to change their business models. They might, for example, require users who wish to use such services to sign up for special service plans, presumably at a higher price, that allow such use and, perhaps, give priority to P2P traffic to ensure stutter-free video streaming. "There's got to be more realism—we may be coming to the end of one model of working," says Kevin Baughan, Virgin Media's technical-strategy director. Since many ISPs also offer video services of their own they are unlikely to look kindly upon free services carried over their pipes.
The question is whether blocking P2P traffic altogether would be legal. Some telecoms companies have blocked customers from making voice-over-internet calls over their broadband connections, because they are worried about how internet telephony will affect the money they make from traditional phone calls. In some countries internet telephony is outlawed for this very reason. But American regulators ruled that this practice was unacceptable when Madison River, a rural operator, tried it in 2005. And in 2006 after a Chilean operator, Telefónica Chile, tried to block Skype, a court ruled that its action was anti-competitive. It is not hard to imagine the same sorts of arguments being applied to video services.
Mr de Wahl says his company is happy to work with ISPs to overcome problems, and he is confident Joost is not about to break the internet. But he is prepared for conflict. "I'm sure some people are going to try and block us," he says. But he notes that similar worries arose with previous internet technologies, such as newsgroups, the web and file-sharing, all of which involved big increases in the amount of network traffic. "I'm not saying this isn't going to take some new infrastructure," he says. "But it's happened before, and the internet is still here."
From The Economist print edition
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