A concern when Bell was discovered to be throttling not only its own Broadband Internet connections to consumers but also on lines being resold to third party ISPs was the potential conflict of interest this might have if Bell were to offer its own Video over IP service. Bell yesterday “closed the loop” by announcing its own Bell Video Store, which offers roughly 1,500 movies and TV shows to watch or buy.
Is it a decent service? On the surface, it seems like its not that bad, though inferior to the Apple solution in many ways, though the one advantage that Bell has over Apple is that iTunes videos are currently not offered in Canada.
To its credit, Bell Video Store (BVS) does support multiple platforms to some degree, allowing movies to be streamed to a Windows computer (not a Mac though), to an Xbox 360 or an Archos set top box, or synced to an Archos portable media player. The biggest drawback is the limited device support, with a growing contingent of Mac users being shut out of the party. If Bell was able to work with a wide range of TV manufacturers to get Archos video streaming support built into the sets, this could be an intriguing application and advantage for the BVS. With Mobile multimedia support becoming an increasingly important feature, the inability to sync BVS videos to an iPod, iPhone, or a Zune is a problem. All in all, this solution appears to be sub-optimal, but is a sign that the value of distributing video over the Internet is being recognized by service providers.
The amazing part of the story is the timing of this announcement from Bell. With customer groups complaining about their Net Neutrality concerns, Bell offering a video service on top of its pipes in competition with over the top service providers appears to be an ill-timed move. Canadian Internet service providers may be looking to increasingly deploy customer data quotas (e.g. Rogers Internet) in addition to video downloading services – the hammer that these carriers have is to EXCLUDE their own video services from figuring out how much data a user has consumed. In other words, customers will be able to use in-house video downloading services without fear of exceeding their bandwidth caps. This peace of mind may be what the Canadian carriers are banking on in gaining share in the video downloading market.
In summary, the timing of this announcement from Bell could be a negative for the company, and could push legistlators to take action to prevent monopolistic behaviour from BCE.
Comcast, on the other hand, is taking a different tack in the Net Neutrality issue, and will likely not go the same route as the Canadian service providers. Comcast has been working with P2P specialists like Pando Networks to more efficiently deliver legal peer to peer file exchanges. In a sense, Comcast’s actions are much more direct and to the point, and serve its long-term goal of playing the role of a gatekeeper in an Internet video age. Comcast could further its role as gatekeepers in 2 ways:
1) Like Rogers in Canada, it could also choose to not count downloads from partners against users’ bandwidth caps, which would be a way that Comcast could get around Net Neutrality concerns.
2) Recall that Comcast’s work with Pando involves P4P, which improves the efficiency of delivering large multimedia files to consumers, in exchange for file registration information being shared between Pando, the end consumer, and with the carrier. Comcast could then charge consumers and content providers for preferential access to their networks and faster access speeds. Comcast is hoping that it will bypass Net Neutrality concerns by not disadvantaging other competing services and simply giving paid content a boost – whether this will pass muster with regulators remains a question mark in my mind. Why? If content that was registered with Comcast were to represent 80% of its traffic, wouldn’t the remaining 20% of traffic content be seriously impaired? With quality of service becoming very important for the delivery of next generation services, assigning guaranteed quality of service to approved partners and “best-effort” quality to the rest of the pipe could be deemed as an infringement of Net Neutrality.
The battle between Internet service providers and over the top service providers like Google and Apple is far from decided. No wonder then that Google is petitioning the U.S. FCC to allow it to use the white space between channels as a form of wide range Wi-Fi – it clearly isn’t happy that Verizon appears to be backing out of the spirit of its open access commitments for the 700 Mhz spectrum band, and desperately wants to ensure that it isn’t blocked by any single carrier looking to shift the balance of power for next generation media and advertising. The next step? A ruling from regulators in the U.S. and Canada will need to weigh very complex issues with regards to Net Neutrality. Preserve the old monopolies and the West falls further behind in terms of innovation, but total Net Neutrality may hurt the business models of incumbents too severely, which may limit future capex investments on network infrastructure…
