Analysis of the economic impact of eliminating net neutrality projects a $2
billion boost in telco revenues by 2010, according to Light Reading Insider
NEW YORK, May 19 /PRNewswire/ -- Incumbent network operators hoping to
boost revenues by charging premium fees for delivery of some broadband
content are likely to realize modest gains if current rules that guarantee
so-called "network neutrality" are eliminated, according to a
groundbreaking new report from Light Reading Insider
(http://www.lightreading.com/insider ), a paid research service of Light
Reading Inc. (http://www.lightreading.com ).
The End of Net Neutrality: An Economic Analysis offers a thorough and
impartial assessment of the revenue opportunity that would be available to
network operators if regulators set aside requirements that prohibit those
operators from charging fees for different tiers of Internet connectivity
service. It analyzes how operators might charge for preferential content
delivery and quantifies the additional revenue they might generate. It also
considers the potential reactions of competitors, content providers, and
access customers to such a move and draws conclusions about the commercial
appeal of the strategy for broadband access network operators.
"At first glance, charges for the delivery of Internet content look as
though they could provide an additional $10.7 billion in carrier revenues
by 2010," notes Simon Sherrington, research analyst for Light Reading
Insider and author of the report. But a variety of factors -- including
potential customer churn, competitive pressures from operators that
maintain net-neutrality policies, and the ongoing threat of re-regulation
-- would likely diminish those revenue gains, Sherrington says.
"If operators could persuade companies representing 20 percent of the
consumer content market to pay a premium for improved content delivery,
they could open a market worth around $309 million in the U.S. by 2010," he
says. "Accessing 20 percent of the business information and ecommerce
markets could deliver a further $1.8 billion by 2010."
Other key findings of the report include:
-- In practice, the widespread imposition of content delivery charges
looks highly unlikely. The difficulties associated with collecting fees
from content providers, managing churn among consumers and businesses,
and fending off competitors make it highly unlikely that any
individual broadband operator could successfully and unilaterally
impose fees for content delivery.
-- Although the introduction of selective charges to save revenue seems to
more attractive financially than the wider imposition of charges,
operators using selective charging mechanisms to prevent competitors
from undercutting them or to prevent revenue losses are likely to face
close scrutiny from regulators.
-- Broadband operators hoping to generate revenues from content delivery
need to offer improved services that content providers will buy.
Operators must identify and provide significant value-adds that enable
content providers to improve the customer experience.
-- Network operators would essentially become direct competitors to
providers of content delivery networks, such as Akamai, Mirror Image
Internet, PantherExpress, Savvis, and VitalStream.
The End of Net Neutrality: An Economic Analysis, a 21-page report, is
available as part of an annual subscription (12 monthly issues) to Light
Reading Insider, priced at $1,350. Individual reports are available for
$900.
To subscribe, or for more information, visit:
http://www.lightreading.com/insider . For more information about all of Light
Reading's Insider research services, visit:
http://www.lightreading.com/research .
To request a free executive summary of the report, or for details on
multi-user licensing options, please contact:
Jeff Claudino
Director of Sales
Insider Research Services
619-229-9940
claudino@lightreading.com
Press/analyst contact:
Dennis Mendyk
Managing Director
Heavy Reading
201-587-2154
mendyk@heavyreading.com
About Light Reading
Reaching a core audience of more than 917,000 enterprise IT managers
and executives, Light Reading Inc. publishes http://www.lightreading.com,
the leading global content site for the telecom industry;
http://www.byteandswitch.com, a storage networking site;
http://www.unstrung.com, dedicated to wireless networking; and
http://www.darkreading.com, an IT security site. Light Reading is also
affiliated with http://www.heavyreading.com, a market research site
offering quantitative analysis of telecom technology to carriers, service
providers, and vendors. Light Reading was acquired by United Business Media
in August 2005, and operates as a unit of CMP Technology.
About CMP Technology
CMP Technology (http://www.cmp.com) is a marketing solutions company
serving the technology industry. Through its market-leading portfolio of
trusted information brands, CMP has earned the confidence of more
technology professionals than any other media company. As a result, CMP is
the premier provider of access, insight and actionable programs designed to
connect sellers and buyers in ways that yield superior return on
investment. CMP Technology is a subsidiary of United Business Media
(http://www.unitedbusinessmedia.com), a global provider of news
distribution and specialist information services with a market
capitalization of more than $3 billion.
SOURCE Light Reading
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Related links:
http://www.lightreading.com
http://www.lightreading.com/research
http://www.lightreading.com/insider
CONTACT:
Jeff Claudino, Director of Sales, Insider
Research Services, Light Reading, +1-619-229-9940,
claudino@lightreading.com; Press/analyst: Dennis Mendyk, Managing
Director, Heavy Reading, +1-201-587-2154, mendyk@heavyreading.com
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