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AT&T's CDN Dreams

Carol Wilson

AT&T Inc. (NYSE: T)'s jump into the CDN pool on Tuesday was hardly unexpected, but did AT&T really make a big splash or just send some quiet ripples through one of the industry's hottest service segments? (See AT&T Launches CDN.)

Other large telecom and cable operators have recognized that fast-growing video traffic demands more locally cached content, and rather than continually feed the CDN beasts such as Akamai Technologies Inc. (Nasdaq: AKAM) and Limelight Networks Inc. (Nasdaq: LLNW), they are looking to capture part of this market themselves. (See Level 3 Sweetens Wholesale Video Offer, Tata Comms Buys Its CDN Partner, Charter's VoD Network Tastes of CDN , TalkTalk to Build CDN With AlcaLu, BT Builds CDN With CDS and Time Warner Cable Hints at Video CDN Plan .)

Verizon Communications Inc. (NYSE: VZ) charted its own path in looking for new revenues in the video delivery world with its Digital Media Services, something it claims is not a CDN -- but industry analysts nonetheless see Verizon challenging Akamai and others who are well-entrenched in the video delivery business. (See Tektronix Unleashes Video Monitors)

And helpful vendors such as Alcatel-Lucent (NYSE: ALU) and Verivue Inc. are designing products aimed at getting telecom operators into the CDN business more quickly. (See AlcaLu, thePlatform Team On TV Everywhere , AlcaLu Gets Down With OTT and Verivue Courts Carrier CDNs.)

They say
Telecom Ramblings notes this isn't the first time AT&T has promised to compete in the CDN market.

"This time around AT&T is no longer doing this in-house, but instead is using licensed technology from EdgeCast and Cotendo to assemble its new CDN platform. But do they really mean it this time?" writes blogger Rob Powell.

Connected Planet observes that AT&T is leveraging not just caching but also content acceleration, targeting mobile users who want to see content instantly.

On its own blog, AT&T is touting the value of operator-based CDN services, and the ability of exercising end-to-end control of video to reduce the number of variables that interfere with video quality.

One thing creating a CDN won't do, according to Forbes' Great Speculations column, is make AT&T a more attractive investment. Apparently, while CDNs are hot in the telecom space, they aren't ringing Wall Street's chimes.

What we say
This is a logical step for AT&T, especially since its first targets are its own business customers, says Joe Lueckenhoff, AT&T's senior vice president of business product management. What AT&T is promising those customers is faster delivery of their Web services content, in a secure setting that AT&T manages for them. Since AT&T is already managing their transport, it becomes another item on the same bill.

This approach has its greatest power in the wireless space, since much of this content now will be delivered to wireless devices. For instance, AccuWeather is already an AT&T customer and uses its CDN to reach the 650 million consumers who have downloaded its wireless app, which delivers weather based on GPS locations. Where AccuWeather used to do this one device at a time, AT&T enables the weather forecaster to deliver the weather once to reach all users in a given geography.

Is AT&T challenging Akamai? No, because it's trying to solve a different problem. Whether it succeeds or not will depend on its execution.

— Carol Wilson, Chief Editor, Events, Light Reading

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User Rank: Light Beer
12/5/2012 | 5:00:31 PM
re: AT&T's CDN Dreams

I think this is the key point: "Since AT&T is already managing their transport, it becomes another item on the same bill."

Which is why much of the CDN middleman business eventually goes away as the technology (which is all it really is) becomes a line item on the service provider's bill (at best) or bundled for free.

User Rank: Light Beer
12/5/2012 | 5:00:05 PM
re: AT&T's CDN Dreams

How is the problem AT&T attempts to solve different?

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