March 24, 2013 – Amid network service providers’ uncertainties over how far they can go in pursuing new broadband business models under current Net Neutrality rules, the good news is there are new ways to maneuver within the vaguely drawn boundaries.
For example, next-gen OSS supplier Active Broadband Networks recently demonstrated a use of its technology at the CableLabs Winter Conference that could open a path to generating revenues from high-quality user experiences tied to select OTT content suppliers. The third-party subsidized services concept utilizes Active Broadband’s flagship product, the Dynamic Broadband Service Manager (DBSM), to facilitate agreements between content providers and subscribers under which content providers are able to transact for broadband services on behalf of subscribers, presumably without violating Net Neutrality or other regulatory requirements.
“As residential broadband providers adopt usage-based service management techniques to manage the tremendous growth in subscriber demand, there is an opportunity for operators to introduce innovative ways for third-parties to subsidize the necessary capacity or throughput for bandwidth-intensive applications and services,” says Active Broadband CEO Adam Dunstan. “We have enhanced the capabilities of the DBSM to facilitate these new ways of monetizing broadband service delivery.”
In this case, subscribers can be offered the choice of usage subsidized by the content provider instead of having their service managed under the standard terms of their high-speed Internet service, Dunstan explains. The DBSM allows third-party management of a subscriber’s account, under the subscriber’s control, by leveraging a combination of capabilities in the DOCSIS network and the DBSM platform. Operators are able to deliver data services that satisfy the requirements of third-party content providers and be compensated accordingly.
While the third-party subsidized services approach hasn’t been fully vetted with lawyers, the fact that an unnamed MSO supported the demo signals the strategy has merit, notes Steve Collins, vice president of product marketing and business development at Active Broadband. “Under Net Neutrality you can’t have relationships between content providers and broadband operators such that the operator does anything preferential for the content provider,” Collins says. “So maybe there’s a monetization model where the content provider subsidizes usage on behalf of the consumer of the content.”
In other words, the content provider is billing the consumer for usage, but the operator is getting a share of that payment as a third-party subsidy for the better experience. By virtue of the dynamic way that the Active Broadband platform processes raw data collected through the DOCSIS IPDR (IP Detail Records) process, such arrangements can be executed incrementally on an as-needed basis and billed accordingly through transaction processing linked to the operator’s billing system.
If, for example, the user is on a given tier where the data rate is high enough to support video, the goal may not be to deliver a higher tier data rate for a subscriber accessing the third party’s content but rather to ensure that congestion at a moment of peak usage doesn’t reduce that user’s data rate to where the video viewing experience is subpar. Anytime this happens under the policy conveyed to the CMTS (cable modem termination system) by the DBSM’s Active Resource Manager, the details of the implementation are transferred through the Active Service Manager transaction processing engine to the billing system.
As complicated as this might sound, it’s actually a natural extension of the highly scalable usage management capabilities Active Broadband has been executing for customers in a variety of ways since the mid 2000s, Collins notes. “What we sell are solutions that allow operators to measure, manage and monetize broadband services,” he says.
“In the early days of broadband there was no focus on such capabilities because it was all about building revenue by adding subscribers,” he adds. “But in recent years as subscriber growth has tapered off, per-subscriber usage has skyrocketed. Now the crunch operators face isn’t to build out their networks but to operate their networks profitably.”
Active Broadband got started working with a large North American operator who needed a solution for measuring usage on a per-subscriber basis. “This was a non-trivial tech challenge,” Collins notes. “Accessing IPDR every ten minutes we take a snapshot of all the usage and shift that data to a central collector where our software creates the individual subscriber usage records.”
Setting up this capability has allowed Active Broadband to execute multiple approaches to real-time active management of how the broadband connections are used, he adds. For example, in another new approach to monetization, an unnamed European service provider is working with Active Broadband to go beyond simply enforcing monthly usage policies to managing usage on the basis of how any given subscriber is impacting the data flow during peak hours.
In this case, the goal is to prevent people whose monthly data consumption may fall within the caps of a lower tier from persistently engaging in usage typically associated with a higher tier when such usage really matters, Collins says. “Active Broadband’s DBSM measures and monitors per-subscriber (household) usage during periods of peak demand and tracks cumulative usage against one- to two-hour ‘sliding windows,’” he explains. “If a subscriber’s usage exceeds the threshold specified for their service tier, the system will automatically take some type of policy action that could range from simply notifying the subscriber to actively managing the subscriber’s service to bring their bandwidth consumption back in line with their service tier.”
Putting this same level of incremental per-subscriber management capabilities into play for the third-party subsidized usage strategy may be likened to any type of telecom wholesale service that a carrier’s customers can sell at retail. “If a gaming provider is selling a game where the quality-of-service depends on high-speed action, the provider has to deliver that QoS, and maybe the way to do that is to utilize the operator’s capabilities, in which case the gaming provider is paying for that QoS on behalf of its customer,” Collins says.
Seen in this light, it’s hard to imagine that Net Neutrality rules would be applied to discriminate against one of the ways a content provider might choose to fulfill its commitment to users. In any event, Collins says, the point Active Broadband is making is that its technology can be used in many ways to facilitate monetization and more efficient usage of broadband than has been possible up to now.