1. ACE/RUS School and Symposium Corralling the Broadband Stampede How Has and Is the (Video) Network Traffic Changing? Tom Lewis, PE Vice President - Engineering Presented By

2. Video Traffic Trends  Are you in the video business?  You are if 2/3rds of your Internet traffic is video  Current and projected requirements for:  Managed IPTV (traditional Telco TV)  Unmanaged Internet Video  Planning for future, corralling the video stampede  Capacity planning, impact on flat-rate Internet model

3. Managed IPTV  Multicast SD and HD  Historic Bandwidth requirements:  Backbone transport from Headend: 1Gbps or 2.5Gbps in past was adequate for avg SD/HD lineup  Access ~ 25Mbps minimum (2HD + SD + Internet)  Increased HD viewing primarily impacts Access  To compete with satellite, need to be able to deliver 6 simultaneous HD channels = 48 Mbps + Internet  This requires VDSL2 or FTTP

4. Channel Lineup Multicast Bandwidth

5. How is IPTV traffic changing?  New IPTV services require a significant amount of bandwidth for unicast traffic such as:  Video on Demand (VOD)  Timeshifted Viewing (Network DVR for select channels)  Microsoft Mediaroom Instant Channel Change (ICC)  Unicast Impact on Network  Transport backbone: need 10GE  Last Mile Access: Slight increase for ICC  Distribution rings: How many subscribers can be served via a single GE feed?

6. Estimated Traffic in a Mediaroom Network for 500 Homes This Conservative Model assumes the following – 500 Households – 70% of Households watching TV – 10% of viewers watching VOD – 5% of viewers watching timeshifted content – 3% of viewers in fast channel change 329 Mb/s 270 Mb/s 67 Mb/s 110 Mb/s Total Traffic = 776 Mbps Unicast In a modern IPTV Network unicast video bandwidth usage can quickly outpace traditional multicast usage

7. Bandwidth Usage Versus Subscriber Counts

8. Internet Streaming Video  We all know Internet Video traffic is exponentially increasing, but the rate of change is difficult to grasp.  Where does it end?  Good Sources for Internet Video traffic statistics  Cisco Visual Networking Index  Calix U.S. Rural Broadband Q4 2011 Report

9. Internet Video Today  Calix report findings for Q4 2011:  Video streaming accounted for 67% of downstream traffic, and providers with 100% FTTP saw 78% Netflix is by far largest component, at least 2/3 of all video  For comparison, browsing accounted for 19% downstream  P2P was only 1%  5% of users accounted for more than 50% of Internet traffic  Fiber subs generate 2.67 times more traffic than DSL subs  Average monthly download was 12 GB. Fiber average was 28.6 GB per month. Calix findings are consistent with N-Com’s recent analysis of client’s traffic.

10. Sample Daily Aggregate Report from April 2012 10

11. Sample Internet Traffic Report  Peak Usage around 9 PM. Peak usage is twice the average throughput.

12. Cisco 2011 VNI Report  Busy Hour Internet traffic will grow 5-fold by 2015 vs avg traffic growing 4-fold  Peak traffic is 2.5 times the average throughput  Globally streaming video accounts for 50% of consumer Internet bandwidth, growing to 62% by 2015  Internet video to TV will continue to grow at a rapid pace, increasing 17-fold by 2015. Internet video to TV will be over 16 percent of consumer Internet video traffic in 2015, up from 7 percent in 2010.

13. Projecting Internet Video Growth  So where are we at on this roller coaster?  What percentage of subscribers are consuming Internet Video today?  From Calix report, 11% of subs generate 64% of traffic, more than 50GB monthly  Netflix movie ~ 2.5GB Source: Calix

14. OTT Video Projection  We are still very early in the OTT adoption curve  If other 89% adopt OTT viewing pattern of today’s top 11%, would result in approximately 6 times today’s traffic.  In our analysis of client’s traffic, the average Netflix stream per session is less than 1 Mbps. As more viewing takes place on TVs and/or subscribers upgrade broadband speeds, this will transition to the Netflix “best’ rate of around 2.2Mbps for non- HD content. So another growth factor of approximately 2 times.  So as a guestimate, OTT traffic could increase by 6 x 2 = 12 times over coming years. 12 x todays monthly average of 12GB gives a possible future average of 144 GB monthly.

15. But wait, there’s more….  OTT is just the initial phase. Over coming years the entire video industry will transition from today’s CATV linear model to on-demand, “cloud TV”  According to Nielson, average individual American watches almost 5 hours of traditional TV every day, compared to 30 minutes of Internet video  Assume average home views 1.5 x 5 = 7.5 hours per day  In future, a cloud TV home could require 7.5 x 30 = 225 hours/month x 2.3 GB/hr for HD = 517.5 GB/mo

16. And so we have Caps  Comcast, AT&T Uverse, CenturyLink and Suddenlink are all examples of providers that have implemented 250 GB monthly caps.  From the Comcast website:  To put this usage in perspective, 250 GB is the equivalent of:  downloading 62,500 songs (173 days worth of music);  uploading more than 25,000 high-resolution photos; or  streaming between about 100 to 800 hours of video (the range depends upon whether you're streaming studio-quality video or good-quality, standard-definition video, which have different bit rates depending upon the provider).  Caps from non-landline broadband providers:  Wildblue Exede plans max out at 25 GB  Verizon HomeFusion Fixed LTE service top plan is 30 GB – 24 hours of Netflix binge viewing

17. Possible Industry Initiatives  Traffic growth must be linked to revenue growth  Possible Measures or Mitigation Methods  Caps  1-800 model: content providers pay service provider to be cap-free  Subscriber usage based plans ($/MB)  Caching, or bring CDN provider into your network

18. Observations  Key in sizing Internet uplinks is now the “primetime” 7 to 10 PM video viewing period. Maybe caps should only apply to downloads during these times?  In planning any network upgrades, have evolution path to ultimate future “cloud TV” bandwidth requirements. This needs to be considered in deciding between 1GE vs 10GE, 10GE vs WDM, etc.  OTT/Cloud TV impacts backhaul requirements, not Access network speeds. E.g., 200 subscribers each using 5 Mbps for video exhaust a single GE feed.

19. Conclusions  We all watch way too much TV. Netflix growth rate and Mayan prophecy connection?  Begin routine monitoring of your Internet traffic usage, track growth trends  Have plans for gaining access to most economical Internet uplink providers that can support growth  Evaluate subscriber package modifications