SM: Let’s take that question and apply it to all these recent media reactions you are getting about Level 3’s announcement that CDN is going to be a commodity and all these telcos are going to provide CDNs. [My previous coverage here.]
TL: I think the Telcos have always provided CDN. There has been no reaction that I am aware of in the customer base. We have always had competition from the big networks.
SM: There is a fallacy in the understanding of what telcos can do and what you are doing with respect to what you were saying earlier especially in the middle mile of the network.
TL: There is not a good understanding of what you really need to do to scale in terms of content delivery. That’s true.
SM: That is the point I am getting at.
TL: I think there have always been companies doing the core data center approach. It is easy to do. You buy servers, stick them in a data center, give it transit. You can start a company very easily with that model. There are probably two dozen companies, a dozen of which started in the last year, doing just that. It is quick, dirty and cheap.
You then find out your quality is not good. Customers all recognize that quickly, but then you get the argument that the quality does not matter for video, so who cares if the latency is large? In fact, it does matter. Latency drives the throughput. If you are trying to deliver video from the data centers, say 20 data centers around the world, for a lot of the end users, you won’t even be able to deliver TV quality, let alone DVD or HD.
The congestion and the scalability are a big problem. Just from how the protocols work, if you are 70 or 100 ms away, you cannot get the rate of traffic into the home to support 2 MB a second which is TV quality. DVD is 5 or 6 MB a second, and HD could be 10 to 15 MB depending on which brand of HD you are doing. You could only get that sustained rate if you are delivering within 100 miles, due to the way current Internet protocols work. That is not well understood. A lot of these folks do not want to understand this at some level because it is not a good story for them. They say “I can deliver video to the whole world from my data center”, and that is true, but you are not going to get the throughput needed to have a true on-demand experience with high quality.