We recently profiled a presentation by deep packet inspection (DPI) vendor Allot that suggested mobile carriers could make more money by charging one fee to use a Facebook app and another to run a YouTube app.

Some readers seemed to find this idea speculative and unlikely to happen in practice—which is why it's worth pointing out just how easy it is to do traffic prioritization, and how it's already being done.

Don't charge for bits, charge for "value"



For instance, on November 30, the Canadian DPI vendor Sandvine talked up its "media optimization solution." (Sandvine, you may recall, was widely fingered as the company that provided Comcast's P2P throttling solution back in 2007.) Carriers can configure their network policies so that certain subscribers have their requests for media content diverted to better servers; those who don't pay for the privilege won't receive such "optimized" treatment.

Or perhaps a handset maker like Apple could work out a deal with a carrier like AT&T under which its own devices would receive the optimized media treatment, while BlackBerry owners sit in the slow lane when waiting for a video clip. Here's how Sandvine describes it:

Operators can integrate Sandvine’s media optimization solution with other network policies (based on conditions such as time of day, subscriber tier, bill state, and client device) to create tiered service plans tailored to meet consumers’ needs. For example, subscribers that want to enjoy movies on their state-of-the-art mobile devices anywhere, anytime, could opt to subscribe to a service plan that optimizes that experience. Operators can deploy such solutions with minimal investment due to Sandvine’s patent-pending, advanced, granular method for diverting traffic, which ensures that only appropriate traffic flows are redirected to optimization platforms.

DPI vendor Arbor Networks makes a similar pitch for its eSeries appliance—carriers can stop offering flat-rate plans to everyone and can really get into the nitty-gritty of traffic discrimination. The basic principle here is that some bits are more valuable than others, and carriers are leaving money on the table when they allow people to access valuable websites and services without charging more for the most popular ones. Arbor calls this a "value-based revenue model."

Customers can freely choose the service bundles and payment options that suit them. Meanwhile, you gain the insight needed to move from a flat fee to a value-based revenue model that increases profitability. The eSeries solution enables you to craft service plans based on usage quotas. You can attach these quotas to your broadband services as a whole or to individual applications like peer-to-peer (P2P) file sharing, video streaming and email.

Most other DPI vendors make similar pitches about the importance of traffic discrimination and how it can help revenue. It's not hard to imagine a world in which Internet providers do things like exempt their own video and TV services from quotas while applying them to competing Internet video sites like Hulu and Netflix. Indeed, this is basically Arbor's example for how to use its gear:

Adding Application Awareness to the Quota: Enables providers to bill for heavy-use applications but allow unlimited Web browsing and email, or exclude applications like IPTV to avoid double billing.

Browse static websites? No worries (since they don't compete with ISPs). But heavy-use connections (read: video) could be limited and/or billed for, while a carrier's own video product could be exempted from the caps. It's diametrically opposed to a "pay for a chunk of bandwidth and use it how you like" model. Carriers will not become "bit haulers" without a fight to the death (witness the recent US spat over "managed services").

This limited model is basically how Telstra's BigPond broadband works in Australia, where Telstra is the dominant incumbent telco. Strict data caps apply to the service—unless you buy music, movies, sports, or gaming content direct from Telstra. All of those services are exempted from the cap.

WoW works better... for a fee

But DPI gear can be far more granular than this. Imagine an ISP where every type of traffic had a different prioritization, and where paying for a higher-priced tier meant that online gaming suddenly worked better. Bump up another tier and FTP servers suddenly work better. It's not about the total bandwidth, but about changing prioritization based on what tier you buy.

You don't have to imagine it; it's exactly how UK ISP PlusNet works. Indeed, PlusNet is unusually open about its prioritization and discrimination (it uses Arbor Networks gear). Here's the chart showing how it works:

Whether this is problematic depends on who you ask. PlusNet, for instance, says it always puts VoIP calls near the top of the list to ensure that there are no problems, while less-time-sensitive material doesn't need the same level of service. The company does not appear to be shaking down Internet companies for better access to customers or engaging in outright protocol blocking in any tier.

Net neutrality advocates, of course, tend to look on most forms of traffic discrimination with a wary eye, and they note that even a massive ISP like Comcast has found far less discriminatory ways to manage congestion, ways which allow users more control of what they do online.

Even the fairly weak net neutrality rules being considered this week by the FCC would make such practices transparent—though transparency doesn't help much without vibrant competition. Look at Canada, where transparency meant that every major ISP in the country finally admitted to throttling P2P traffic—but the revelation didn't make them change their ways. As Canadian ISP Rogers puts it, the company "currently manages upstream peer-to-peer (P2P) file sharing applications speed to a maximum of 80 kbps per customer. This policy is maintained at all times."