ISPs And The Growth Of OTT Video

Internet Service Providers (ISPs) are experiencing significant growth in bandwidth consumption largely due to the uptake of OTT video services and the growth in numbers of connected devices per household. ISPs are therefore navigating the path of making investments in their networks that support their own financial requirements and their customers’ expectations.

An overarching objective for ISPs is to provide sufficient bandwidth to supply their customers’ data demands. As demand grows new bandwidth bottlenecks appear, which in turn create new areas of performance degradation. ISPs therefore manage a continuous cycle of network expansion, upgrade and maintenance. Video traffic in particular is placing the heaviest of demands on ISP networks, quickly revealing new bottlenecks and new performance issues. As providers of competitive broadband services, ISPs have a firmly vested interest in ensuring that their networks are delivering what their customers expect.

From a network performance perspective, ISPs focus mostly on bandwidth and data packet loss. Bandwidth looks at how big the capacity is, packet loss states how well the network transports the data. Net neutrality rules that prevent ISPs from prioritizing some types of data delivery over other types mean that a focus on data packet loss is the best an ISP can do. But video, particularly live streaming video, is most sensitive to network conditions, and because the customer experience of OTT streaming video is of growing importance to the whole media industry, ISPs are acutely aware of how important it is to know that video is traversing their network successfully. This ISP-consumer dynamic is leading ISPs to deploy new technologies that support video quality management while creating new and deeper partnerships with OTT operators.

ISP Network Capacity

Managing network capacity is an everchanging balancing act. The network is the supply and the data it transports is the demand. Push too much demand at the supply, and the first point at which a lack of supply is encountered will result in performance degradation.  Unlike a riverway that can burst its banks if too much water flows through, a fiber-optic cable or copper wire will simply drop data that it cannot transport. Video consumers then see spinning wheels or sub-standard images – this is the Quality of Experience (QoE) issue that must be avoided, particularly for live video.  Unlike water loss from rivers, packet loss from video streams immediately creates pressure on upstream capacity as packets are re-requested.

In managing network supply, ISPs have various bandwidth challenges to overcome. Many ISP networks buy “last mile” services from a national or regional access network provider. Some ISPs build their own end to end network and have full autonomy. But the level of investment over time in different network elements, and the relative speed of consumer uptake of bandwidth-hungry services, creates different bottleneck dynamics to resolve for each ISP.

Figure 1 – Capacity expansions for ISPs (orange) and points of focus for improving OTT video quality (green).

Figure 1 – Capacity expansions for ISPs (orange) and points of focus for improving OTT video quality (green).

Italy’s Fastweb, for example, is expanding its aggregation layer capacity between core and access network domains that will better utilize the available 1Gbps of access network capacity per home. As part of this process Fastweb is distributing network capacity closer to consumers and now has 100 data-centers throughout Italy that pass over 22 million households and businesses. In 2020, they experienced a 30% increase in day-time bandwidth consumption as lockdown kept people at home. Like many other ISPs, they have had to review their network capacity planning rules – such as traffic thresholds for network link upgrades – due to the critical nature of working and studying from home.

In comparison, the UK’s BT Openreach is embarking on a large FTTP program to expand bandwidth in their access network. The British Telecom core network was upgraded in the 2000s in BT’s “21CN” Programme, and now the access network is the capacity bottleneck. But by 2030 BT Openreach estimates the bottleneck will have shifted to the home network.

The OTT Operator Relationship

ISPs note how OTT operators are adopting different video delivery strategies and models. While some are investing in public CDN partnerships, others are investing in their own video edge delivery infrastructure. The OTT operators with distributed audiences (i.e. multi-national audiences) or relatively infrequent streaming patterns continue to focus on their public CDN partnerships, while OTT operators with densely located (i.e. national) audiences and frequent streaming patterns are creating private video network capacity by working directly with a relatively small set of ISPs.

In video distribution the “edge” of the video delivery network is a big talking point. This often means the edge of a CDN which then interfaces with the ISP network, either through peering or direct interconnection. From this point on, ISPs manage a range of widely deployed network infrastructure to transport the video to the consumer. The infrastructure of highest priority to the ISPs includes the interconnection and/or peering points with CDNs, the ISP’s own data center infrastructure for data aggregation, the long-haul networks connecting all sites, their own CDN for on-net video distribution (if applicable), and the consumer premises equipment (CPE) including the home gateway.

While the ISP’s own infrastructure is complex and distributed, the network paths that video follows can be even more complex, as the total ISP infrastructure in a country involves inter-connection between some, but not all, ISPs. Generally, the larger ISPs have carrier agreements with other large ISPs so data can traverse their networks to reach an end consumer. In the context of OTT video delivery, and in particular where the OTT operators have QoE concerns, this inter-connected IP transport layer can be a concerning black-box.

OTT operators seeking to address QoE concerns are focusing on private CDN deployments inside ISP networks. This strategy is designed to improve the quality of video delivery and protect the end customer experience. For the ISP, this investment can reduce pressure on peering points, but it can also ensure their broadband customers are more satisfied with their OTT video experience. As live video streaming grows, and major events have larger and larger OTT audiences, the end customer’s experience is as important to the ISP as it is to the OTT operator.

The Consumer Relationship

ISPs support all forms of data delivery to their customers, but streaming unmanaged video from OTT operators represents approximately 60% of the total. Live streaming video in particular creates the biggest challenges from a quality-of-service perspective. Not only because live video streaming should be of a consistent quality which is challenging to achieve across dynamic, multi-use IP networks, but also because audience sizes are difficult to predict. Capacity Planning and Video Quality Assurance are inter-connected disciplines within ISPs that together contribute to the final customer experience.

The customer experience is a critical point of market differentiation between ISPs providing a broadband service that is as essential as water, gas, and electricity supply. To provide an excellent customer experience for OTT video is a particular challenge as the ISP cannot see the content of the video stream and cannot independently know what the customer’s experience actually is. And yet this is the area in which ISPs are being judged by their customers.

There is growing pressure to create clarity of ownership of the OTT video customer experience in the home. For a single stream into a single household, the answer might clearly be “the OTT operator with help from the ISP”. But for a single household receiving multiple streams simultaneously from multiple OTT operators, who controls what? Should the answer be “the ISP with help from the OTT Operators”?

If the ISP needs to take a lead role in managing customer experience, they need to know about video delivery and they need a way to act on this for the benefit of their consumers. This idea is strengthening the need for closer direct partnerships between ISPs and the largest OTT Operators. While OTT Operators look to private CDN infrastructure and quality monitoring of their own streams, ISPs are focused on offering stream management tools to their customers to enable device-level prioritization in the home (e.g. prioritizing a SmartTV over a mobile phone), while considering new video monitoring and testing tools that can give them independent verification of video quality over their networks.

The Environmental Relationship

A discussion about expanding network capacity, driven by people’s desire to consume video, should consider the network’s impact on the environment.

In 2015 the United Nations launched Agenda 2030, as part of the drive towards reducing global carbon dioxide levels. The International Science Based Target initiative (SBTi) was established to provide methodology and certification to businesses for their CO2 reduction plans.

Fastweb, part of the Swisscom group, serves 2.7 million residential and business customers on its fixed network in Italy. Fastweb’s SBTi-approved plan demonstrates how much energy ISPs consume to provide us with our internet services, and what is being done to minimize emissions.

Fastweb also measures its network’s energy efficiency as data traffic increases. The measure is calculated as Total Emissions divided by Total Traffic (TB), with lower numbers reflecting how existing capacity is more heavily utilized.

Finally, the SBTi encourages businesses to measure their indirect emission impacts. Fastweb measured that in 2020 its network helped avoid 245,000 tonnes of CO2 emissions by enabling homeworking and homeschooling making them a net reducer, as opposed to net contributor, of CO2 emissions.

As we consider the impact of ISPs on the environment, and our use of ISP networks for more and more video delivery, it is important to factor in how the overall consolidation of data onto these networks can enable even more energy efficiencies.

Targeting The Win-Win-Win

Video delivery over ISP networks is set to grow continuously for many years to come. Arguably it will grow until we reach maximum digestible screen resolutions, maximum device counts and maximum audience numbers.

OTT Operators and their consumers will push the networks to their limits, and while broadband remains a competitive industry it makes sense that ISPs strive to deliver an industry-leading customer experience to their video-consuming customers.

To assure this all-important customer experience, OTT Operators and ISPs will develop closer partnerships to share information about streaming quality and customer experience, which will then inform ISP investments in their networks. Deploying OTT video tools inside ISP networks to provide this necessary information is a good first step.

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