5G, Your Neighbors and Net Neutrality
In the last few weeks, widely anticipated new streaming services like Apple Plus and Disney Plus joined the established players Netflix, Hulu, Amazon Prime, HBO and others. The timing is strategic, just prior to the busy holiday season, capitalizing on cross-generational cord cutting of traditional cable. Most all have integrated other digital experiences like purchasing products through Alexa or Siri to bolster the return on investment in capturing data sets with greater hooks into consumers. But, will all this streaming across devices slow down the internet? If we can’t get our shows when we want them, who do we blame: Apple, Disney, Verizon, ATT, Spectrum, or is it our neighbors? To understand the future of streaming, let’s break this down into a couple of key components:
How Streaming Works (for the layman)
When you are streaming, you are relying upon your internet service provider (i.e. Xfinity, Frontier, Mediacom, Cox and Verizon, Google Fiber, Spectrum, ATT), “ISPs”, to deliver the content between you (your phone, tablet, tv, etc) and the streaming service via the global network of computers connected through a distributed server system (i.e. the internet). Unlike traditional websites, streaming video is actually requiring data packets to be distributed using a protocol which prioritizes speed over reliability.
Once the streaming service has produced the video, they encode and compress it from a super large file into something more manageable. They then deliver this to a media server. The streaming services are investing in servers located all over the world. The closer you are to that server, the faster and better your service will be. Once the data packet containing the compressed video is delivered to the media server nearest you, they utilize appropriate transfer protocols to the playback device (i.e. phone, tablet, tv) and then it travels via your internet service provider to you, bit by bit (hence streaming and not downloaded). Probably the most critical piece is what content delivery network (server) your streaming service is using and what type of support they provide to your ISP. Some streaming services provide open connect appliances (hard drives full of popular content) to reduce the need for the ISP to redirect your internet traffic. Netflix, for example, uses more than fifteen percent of the world’s global internet bandwidth. This is why their investment in those content distribution centers is so critical – Netflix provides that to your ISP to enable more internet traffic.
ISPs, 5G & Your Neighbors
If all your neighbors are also streaming and you share the same ISP, it’s possible for that to create congestion and slow down your service, but new technology and how your ISP manages congestion can help solve that problem.
First, there is 5G. 5G is intended to be like wireless fiber, with super-fast internet everywhere. Currently, we operate under 4G standards. Verizon, ATT and T Mobile all have rolled out some form of 5G. It is currently limited to a few cities and the signal only travels about 800 feet from a cell site, which limits actual impact to date. Despite all the advertising you might see, 5G is largely a technology investment that will play out over the next decade. Like any roll out of new technology, investment in infrastructure and fixing problems will be a big part of the work to be done. For now, 5G isn’t going to change your streaming speed.
There’s also fiber optic cable, such as Google Fiber or Verizon FIOs. Fiber broadband is currently the fastest internet available. Fiber optic uses light instead of electricity to transmit data so the capacity is much greater. Only twenty-five percent of American homes currently have fiber optic connectivity. As we move into the age of live streaming, the need for increased capacity will create greater demand for fiber and 5G to power our lives. For the ISPs, the infrastructure of fiber is costly, particularly when old infrastructure is still working. The more there is a consumer demand to pay for fiber optic, the greater the incentive for the ISPs to make that investment.
Between fiber and 5G alongside the investment the streaming services are making, it will only get better, but at what cost?
Net Neutrality & the Great Experiment
Remember a couple of years ago when the neutrality rules were rolled back and everyone panicked that the internet would somehow crawl to a halt or be unfairly available? Without net neutrality, the ISPs have the right to choose to block sites, speed up or slow down service to customers based upon what level of service and how much data they use or even provide fast lanes directly to the streaming services. With net neutrality, the ISPs have to treat everyone equally, which sounds great, but may not do a lot for speeding up or improving the service the way they are actually working. And, if your neighbor is using terabytes of data 24-7 clogging up the network, would that seem fair? For streaming, it is actually helpful that the ISPs can work with the streaming services to cover some of those costs and attempt to manage or charge for excessive data usage, particularly during peak times. Of course, the streaming services pass it on to us in the form of subscription fees and they are also capturing all important data about us. Time will tell as we see how prices change and fluctuate for both our ISP service, 5G wireless and streaming content subscriptions. If net neutrality is in place, the idea is that it makes it fair access for everyone. But, it also eliminates the financial incentive and the return on investment for ISPs to speed up or improve service and work with the streaming service providers. There are a lot of components to our new reality: ISPs, wireless providers, content streaming services and devices. If the government impedes their ability to make money under net neutrality rules, we likely won’t have the same level of content or service available. However, if the ISPs fail consumers in this critical age of streaming, government intervention will be inevitable.
We have just entered the streaming age of video games and content. In the near future, virtual and augmented reality will transport us to other times, places and give us alternate views of reality all from our home via the internet. Whatever industry you are in, this will transform how your work force learns and lives their lives and it will change how customers think and buy products.
No, the internet won’t break because of streaming, it will get better, change and evolve. How will you and your company?
For a great video on net neutrality, check out this WSJ video:
If you are interested in a keynote, workshop or facilitated discussion on emerging technologies, future trends, cybersecurity or cultural shifts for your next board meeting or executive retreat, contact me at jwolfe@consultwolfe.com or 513.746.2801.