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Optical/IP

Online Games Pose Carrier Conundrum

It's more a trickle than a tsunami, but a study shows online gaming, the application that drives so much bandwidth usage in Asia, is beginning to take hold in the United States. The challenge for carriers will be to make sure they can make money off the trend.

Online gaming could consume one third of all U.S. backbone traffic by 2008, or 735 petabits per month, according to Eric Mantion, an analyst with In-Stat/MDR. Worldwide, online games accounted for 2 exabits (1018, the step after a petabit) of data being transferred last year, Mantion says.

The U.S. experience isn't the same as what's happening in Korea, where individual games attract millions of participants and tournaments are broadcast on TV. Still, the numbers show that interest is brewing. About one sixth of the U.S. population plays online games now, and that figure should grow to one half by 2008, Mantion estimates.

That's a nice chunk of traffic for carriers, but they face the problem of getting paid for their work. "When you pay money to play EverQuest, you're paying that company. You're not paying Qwest or whoever you buy broadband from," Mantion says. "Lots of people want to talk about the revenues [from games] but they don't calculate the impacts."

Even though games will take North America slowly, compared with Korea, carriers and equipment vendors need to start making provisions, Mantion says. For example, Sun Microsystems Inc. (Nasdaq: SUNW) has appointed a chief gaming officer and is developing a server specifically for online games. It's conceivable that carriers could likewise appoint executives just to deal with the effect of games on the network, Mantion says.

"For years, broadband providers have used these Web caches. I might get something from a Yahoo Website, but two seconds later, you might get it from a cache. In the same way, they're going to have to start adding game servers to their networks," Mantion says. "If the broadband players don't do anything, they have substantially more to lose than the price of a few game servers."

AT&T Corp. (NYSE: T), for example, provides some of the North American Web servers for Blizzard Entertainment, which runs its own network for massively multiplayer games such as WarCraft III. AT&T doesn't get money from the games directly, but the traffic does cross AT&T's network, guaranteeing the carrier a bit of money from service providers. "It's like foot traffic," Mantion says.

Of course, broadband access will need some changes as well. Cable, being a shared medium, already has a throttling mechanism. DSL would need something equivalent to make sure gamers don't eat up bandwidth. "Instead of pricing access, you start price services," says Frank Dzubeck, president of Communications Network Architects. "They only way [carriers] are going to get a piece of the pot is by you buying more bandwidth."

The real backbreaker for the U.S. networks will be video -- HDTV in every home -- rather than gaming, Dzubeck says. Either way, he doesn't think networks aren't prepared to handle the load: "The metro's not built out. If you do fiber to the home, we don't have enough in the metro. If we ever do a buildout like Verizon or SBC wants to do, forget it."

— Craig Matsumoto, Senior Editor, Light Reading

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Flower 12/5/2012 | 1:37:17 AM
re: Online Games Pose Carrier Conundrum Every quote in this article shows that the carriers have absolutely no idea what they are talking about. All they can think of is: "hey, this stuff is popular, it's for kids, we should be able to ripp them off somehow".

Carriers should transport bits, and nothing more. When you have a proper ISP, you can do gaming just fine today. The biggest problem is the speed of light, you just can't play a game that is based on reaction speed when your opponent is a few thousand miles away.
grunt 12/5/2012 | 1:37:16 AM
re: Online Games Pose Carrier Conundrum well - it might be nice if the carriers decided to alway just provide bandwidth at some declining price per bit, however, they can do something to improve their profitability. What is special about online gaming is that it is interactive and thus benifits from low latency. sooo if I own the DSLAM and give you $30 256k service with _no_ real SLA why not charge $50 for a gamer SLA? I know it may not realy cost anything for them, but it is a better product then the no SLA version and no QoS. Right now the BW utilization of cable and DSLAMs is low enough that gamers dont have any issues, but as these pipes fill up they will start to have issues. This is when the carriers can choose to 1. just increase the bandwidth between te DSLAM and the internet and notget any extra $ or 2. enable QoS and up sell the gamers/business users and generate more $ on the same infrastructure. Which would you choose as the CEO of the telecommunications firm?
Until cheap broadband comes with decent SLAs and QoS bundled I know I will eventually get nailed by this up sell.
grunt 12/5/2012 | 1:37:16 AM
re: Online Games Pose Carrier Conundrum well - it might be nice if the carriers decided to alway just provide bandwidth at some declining price per bit, however, they can do something to improve their profitability. What is special about online gaming is that it is interactive and thus benifits from low latency. sooo if I own the DSLAM and give you $30 256k service with _no_ real SLA why not charge $50 for a gamer SLA? I know it may not realy cost anything for them, but it is a better product then the no SLA version and no QoS. Right now the BW utilization of cable and DSLAMs is low enough that gamers dont have any issues, but as these pipes fill up they will start to have issues. This is when the carriers can choose to 1. just increase the bandwidth between te DSLAM and the internet and notget any extra $ or 2. enable QoS and up sell the gamers/business users and generate more $ on the same infrastructure. Which would you choose as the CEO of the telecommunications firm?
Until cheap broadband comes with decent SLAs and QoS bundled I know I will eventually get nailed by this up sell.
jeb_knucklehead 12/5/2012 | 1:37:15 AM
re: Online Games Pose Carrier Conundrum

Flower-

I agree with a lot of what you said. I agree that carriers ought to be in the business of bit transport trucking companies are to frieght. However, like a trucking company, you can probably get some customers to pay for "express" delivery. In the case gaming in the data network, this means priority routing (low latency).

Some of the points I disagree with are:

1) Gaming is not for kids anymore. The vast majority of online gamers are in their early 30's. See this: http://www.usatoday.com/tech/n...

2)Latency in a game is important. But it doesn't seem to be as dependent on geography (and hence the speed of light) as you suggest. It's possible to play against people in large online FPS games who are from opposite ends of the country or even in Europe or Japan. Most of the latency comes from poor routing of data traffic and not actually from the physical propagation of the signal.

-jeb
mr zippy 12/5/2012 | 1:37:14 AM
re: Online Games Pose Carrier Conundrum Flower is spot on.

ISPs (ok, now called carriers) don't build their networks to run one specific type of Internet application.

The "application network" mindset is an old world Telco mindset, not an ISP mind set.

In the book, "Cisco DQOS : Exam Certification Guide", the author makes a very insightful (although pretty obvious) observation about QoS - 'You can think of Qos as "managed fairness" and, conversely, as "managed unfairness."' If you give priority to one type of application traffic, something else suffers.

Because ISPs choose not to dictate what applications customers run over their networks that are part of the Internet, they also choose not to implement either "managed fairness" or "managed unfairness". They will loose customers if the general purpose network is optimised to run one application well (as now it isn't general purpose anymore), as another type of application will suffer. Customers who use that other type of application will leave.

Carriers could choose to build a separate network, optimised for a particular application eg, a specific, gaming oriented network, with low latency, no bulk traffic etc. The issue then becomes how do they prevent non-permitted applications being run over the top of that network. They can use some techniques, such as TCP port blocking etc., however, an IPsec VPN (available in almost all popular operating systems) will prevent that technique working. Also, because of the perceived high performance of this "optimised" network, customers will have an incentive to run their non-permitted applications over it. For example, the mindset will be "it runs games really well, I want to run my other applications over it as well". This perceived high performance for one type of application will provide an incentive for end users to work around any application blocking techniques the ISP comes up with.

Of course, that is overlooking whether the cost and effort involved in building a separate network is commercially feasible. Carriers may be able to build a network like this, whether the target customers will be willing to pay what the carrier needs to charge for it is another, more important question.

AT&T are doing the right thing. Just build a general purpose network, and then add value on top of it, rather than trying to add value in it. Not only does it make sense commercially, it is also the original Internet design architecture.

Upside_again 12/5/2012 | 1:37:14 AM
re: Online Games Pose Carrier Conundrum More brain-dead kids playing games over my internet connection and I have to pay more? Look, it's easy, the carriers need to gut thier fat lazy voice, frame, and atm personel and costs, and get on with pure IP, VOIP and WIFI. Build a better data network for once and for all. Hire all the out of work vendor bubble engineers to progam really cool games and video services... Then sell directly and charge per application. duh !
mr zippy 12/5/2012 | 1:37:13 AM
re: Online Games Pose Carrier Conundrum Hmm, re-reading my post, I'll add a paragraph after this one :

Carriers could choose to build a separate network, optimised for a particular application eg, a specific, gaming oriented network, with low latency, no bulk traffic etc. The issue then becomes how do they prevent non-permitted applications being run over the top of that network. They can use some techniques, such as TCP port blocking etc., however, an IPsec VPN (available in almost all popular operating systems) will prevent that technique working. Also, because of the perceived high performance of this "optimised" network, customers will have an incentive to run their non-permitted applications over it. For example, the mindset will be "it runs games really well, I want to run my other applications over it as well". This perceived high performance for one type of application will provide an incentive for end users to work around any application blocking techniques the ISP comes up with.

In other words, the carrier customers will "drag" this optimised, special purpose network towards a general purpose network. Rather than fighting this, carriers would be wiser to not bother with an application specific network, and avoid an endless "arms-race" with their customers, regarding what types of applications they can and can't run over the optimised, specific purpose network. "Arms-races" are expensive, and, unless one side wins catagorically and permanently, are just a waste of money (did anyone win the nuclear arms race, other than vendors of nuclear missles ?).
sgan201 12/5/2012 | 1:37:12 AM
re: Online Games Pose Carrier Conundrum Hi,

1) ISPs have been proven unprofitable and most of them had gone to chapter 11. So, I do not think replicating ISP's business model is useful for anyone.

2) Policing can be used for the traffic entering the application network.

Dreamer
dljvjbsl 12/5/2012 | 1:37:11 AM
re: Online Games Pose Carrier Conundrum From Dave Farber's IP list. Japan is approaching a capacity limit and needs new technology to overcome it. Is this why Cisco built its large router?


Begin forwarded message:


[Thanks to Adam Peake for this pointer. Some excerpts - BSA]

http://neasia.nikkeibp.com/wcs... CID=onair/asabt/fw/292043

Prediction of Communications Crisis Prompts Japan's Telecom Ministry to Take Action

February 23, 2004 (TOKYO) -- Japan's Ministry of Public Management, Home Affairs, Posts and Telecommunications (MPHPT) is taking the initiative to establish a study group in order to circumvent a potential communications crisis that could occur in Japan due to a sharp increase in data communications traffic.


Predicting that the spread of broadband communications may cause capacity shortages in existing communications infrastructures as soon as five years from now, and strong possibilities of triggering interruptions, the MPHPT plans to launch countermeasures aimed at reinforcing the communications infrastructure. The study group expects to release a midterm report this summer.

According to the report, data communications traffic across the country has been expanded nearly 1,000 times as large as that observed in the last 10 years. If it continues to increase at this pace, the domestic data communications traffic should reach as much as 1,024 times the current volume in the next 10 years.


With the current facilities as they are, a simple calculation shows that actual communications traffic will exceed the backbone's maximum capacity as soon as five years from now.


That is not the only problem. Capacity limits of devices -- routers and switches that constitute communications networks -- are coming within sight. In order to handle huge communications traffic without any delay, large-capacity routers of more than 10Tbps are required. To deal with growing data communications traffic, it is imperative to reinvest in the communications infrastructure, such as an expansion of relay-network capacities by adding new optical fibers and communications equipment.




mr zippy 12/5/2012 | 1:37:11 AM
re: Online Games Pose Carrier Conundrum ISPs have been proven unprofitable and most of them had gone to chapter 11. So, I do not think replicating ISP's business model is useful for anyone.

I don't know quite how to read this. I'd take the word "proven" to mean 100% ie. if you prove something, it is 100% true. So, are you saying that no ISP has ever made a profit from being in the Internet business ?

I know of at least one that has been going for 10 years or so, and I'm sure that if they were having to borrow money to keep going, nobody would have been lending them any by now. Not only that, the ISP business bought the owner a Ferrari quite a number of years ago.

The ISP business is very much a commodity business, which means very little margin. It is a volumes business, in the sense that the more volume you sell, the small margin then adds up. If you go crazy spending on unnecessary capex (as happened in the bubble times), the small margin is wiped out. That is why a number of ISPs went bankrupt - they forgot the formula for running a ruthless commodity business, in the dazzle of the dotcom headlights.

Policing can be used for the traffic entering the application network.

Not if you can't tell what application it is. IPsec hides the application type, as the application type information is hidden within the encrypted payload.

If you ban IPsec, people will then start hiding different applications behind the TCP or UDP ports that are permitted.

The only way to prevent that would be to have a firewall at each customers entry point to the network performing traffic analysis to make sure the application being run on the specific TCP port is the application questioned. It is possible to build these types of firewalls, and for common protocols such as FTP or SMTP they exist. In the context of this article, we are talking about the miriad of games and proprietory game protocols. Every new game that comes out may use a new protocol, which means every firewall at each customer site would have to be upgraded to support each new emerging protocol. That would cause huge operational expenses. I'd very much doubt you could build and run a network/system like this, and be able to cover the costs of doing so, as well as make a profit, compared to what a typical gamer would be willing to pay on a weekly or monthly basis.

Of course, if you start being too restrictive on your network, your competitors will be quite willing to take your annoyed customers off your hands.

Much simpler to just build a good enough network, and then make sure it continues to be good enough, by continually increasing its capacity to prepare for future growth.
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