Video services

Netflix Touts New Content Delivery Network

Here's what's pushing broadband's buttons this morning.

  • Netflix Inc. (Nasdaq: NFLX) is augmenting its use of third-party content delivery networks (CDNs) with a CDN of its own called Open Connect, a move designed to cache video closer to broadband ISPs and reduce transport costs. Netflix said it intends to use CDN partners (Limelight Networks Inc. (Nasdaq: LLNW) and Level 3 Communications Inc. (NYSE: LVLT)) for the next few years, but those relationships won't last forever.

    Netflix expects to have most of its traffic served by Open Connect "eventually," Netflix VP of Content Delivery Ken Florance noted in this blog post about the project. Florance estimates that about 5 percent of Netflix data is already served by Open Connect. Netflix hopes to entice ISPs by offering to install Open Connect servers at their data centers for free or having those ISPs peer with the Open Connect network at common Internet exchanges -- also for no charge.

    Several major service operators have already gone down this path, including Comcast Corp. (Nasdaq: CMCSA, CMCSK), which is using a private CDN for its set-top box VoD service and overarching Project Infinity initiative. (See Comcast's 'Project Infinity' Takes Flight .)

  • Charter Communications Inc. revealed in an Securities and Exchange Commission (SEC) filing Monday that it will open an office in the New York metro area later this year to "house a limited number of senior executives." At the start, at least three ex-Cablevision Systems Corp. (NYSE: CVC) execs that joined Charter recently will use the new facility: CEO Tom Rutledge, COO John Bickham and CFO Jonathan Hargis, who all already live in the NYC area. Charter said other execs will relocate to the New York area, adding that most functions at its St. Louis headquarters will remain in place. The operator also has no plans to change the functions of its Denver-based facility, where much of its engineering group is located. (See Another Ex-Cablevision Exec Lands at Charter and Ex-Cablevision COO Becomes Charter CEO.)

  • Independent Comcast shareholders approved a nonbinding resolution that would dump the company's poison pill takeover defense, reports The Philadelphia Inquirer. As part of a takeover defense that's set to expire in November, Comcast Chairman and CEO Brian Roberts controls 33.3 percent of the votes via a super-voting class of stock. A spokesman told the paper that the Comcast board will take the shareholder vote into consideration.

  • Comcast says it has met its commitment to enable at least 1 percent of its high-speed Internet customers with IPv6 by June 6, also known as World IPv6 Launch day. Comcast said it met the goal on May 24, noting that "hundreds of thousands" of customers are on the new addressing scheme, with one-third of the operator's broadband network already IPv6-enabled. Comcast expects to have all of its Arris Group Inc. (Nasdaq: ARRS) cable modem terminations systems (CMTSs) upgraded to the new addressing scheme in the next few months before setting to work on its base of Cisco Systems Inc. (Nasdaq: CSCO) CMTSs.

  • Alcatel-Lucent (NYSE: ALU) has won a deal to upgrade Cablevisión 's transmission network to 100Gbit/s as the Mexican operator prepares to handle data demand for new 100Mbit/s high-speed Internet services, HD video streaming and business applications. Cablevision will power the upgrade with new Coherent technology that's baked into AlcaLu's 1830 Photonic Service Switch.

    — Jeff Baumgartner, Site Editor, Light Reading Cable

  • msilbey 12/5/2012 | 5:31:05 PM
    re: Netflix Touts New Content Delivery Network

    The Netflix news is both logical and troubling to me. Certainly it makes sense for Netflix to offer free caching hardware to ISPs, just as it makes sense for ISPs to accept the offer. However, as a consumer I have to wonder about Netflix gaining valuable real estate in the last mile, and what that means for other content providers. Once again we have powerful content and distribution interests colliding. And the more integration we see going forward, it seems likely the harder it's going to be for anyone new to break into the business and compete effectively. 

    Jeff Baumgartner 12/5/2012 | 5:31:04 PM
    re: Netflix Touts New Content Delivery Network

    They'll probably have to follow the same model... start with 3rd party CDNs and strike out on your own when you get to a certain size. But I do see your point... can this sort of model put an upstart video streaming company at a disadvantage?

    In the meantime, the news had a mixed impact on some of the CDN guys Tuesday. At last check:

    Akamai: down 6.35%

    Limelight: down 12.59%

    Level 3: up 0.81%


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