Nixing Neutrality

4:30 PM -- It shouldn't surprise anybody to hear that Cisco Systems Inc. (Nasdaq: CSCO) opposes network neutrality, at least in the form being proposed to the U.S. Congress.

"We believe that the notion of net neutrality as defined today, whch says by law every packet gets treated equally on the network, is flawed," said Mike Volpi, senior vice president of Cisco's service provider technology group, during his afternoon talk at Cisco's analyst day yesterday. (See Cisco CEO Talks $10B Markets.)

This doesn't mean Cisco wants service providers to shut you out of certain applications. It's just that Cisco -- along with most of the other vendors we write about -- believes service providers need to be able to sell higher bandwidth and/or better performance in order to keep bandwidth from becoming a dry commodity.

It's true that best-effort bandwidth could end up being enough for most people. "They're going to want peanuts on the Southwest flight," Volpi said. "But there is a subset of users who are going to want to fly first class."

The downside, net neutrality fans say, is that carriers will do the opposite: throttle down bandwidth or cut access to Websites. Neither seems particularly smart or likely, given that it would rouse the Federal Communications Commission (FCC) and that lawsuits have been filed for less. (See Time Warner Subscribers Sue.)

Volpi also noted that "mobility" -- what the rest of us call "wireless" -- is one of Cisco's two big bets in the service provider arena, the other being video. But that doesn't mean Cisco wants to own any cellular radio technology; rather, the company is aggressively courting wireless providers to help craft the rest of their networks, he said.

Why is that important? Wireline speed is at the point of diminishing margins, he said. Yes, everyone talks about the need for 100 Mbit/s for IPTV someday, but for now, most people have enough speed. For wireless data, though, they don't. So, Cisco and its competitors all see some obvious opportunities on that side.

On an unrelated note: Yesterday was Volpi's birthday, and his PR team naturally took the opportunity to embarrass him with a surprise cake -- delivered in a room full of press, no less. Out came the digital cameras:

— Craig Matsumoto, Senior Editor, Light Reading

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