Pro Net Competition Documents
Explainer: Performance Differences on Todayís Internet
There are a number of ways applications providers and Internet portals that provide content improve the quality and throughput of their services and offerings.
Some Internet portals and applications providers are small, and some are very large. Those that are very large (e.g. Google, Yahoo, Microsoft, eBay, Amazon, News Corpóthe parent of MySpace.) often have large "server farms", or computers that store the content, video, web page information and other customer-demanded materials. These server farms are often managed by these content and portals players and they usually involve network facilities, often fiber optics, to interconnect the servers and take their traffic back to the Internet backbone. When a customer "clicks" a mouse on a webpage hot-link, the command goes out over the local network, through an ISPís regional network, up to the backbone (and there are about 30 backbones) and to the "server farm". The web page, music, or video behind that hot-link is downloaded from the server and then sent back to the customer over the backbone.
Backbones are large "long distance" Internet facilities that connect networks (such as local networks) to web sites and portals such as the Yahoos and the Googles. Each backbone may have thousands of content servers and portals connected to it as well as thousands of other ISPs and local networks.
Google and Yahoo each manage a substantial server farm (or farms because they usually have more more than one location) and these "farms" consist of thousands of interconnected servers that are then connected to backbones. Usually bigger companies like Yahoo have their own people who know how to manage networks and who run the server farms and run the connections to the backbone but sometimes they lease facilities or services.
A number of methods are used today to improve the service and quality of the portals and content providers:
Connections to a backbone are needed by these players. Connections are not equal. In many cases, a small player will be able to connect its server to a local ISP who might not connect directly to the big backbone players. Traffic from these players must go through numerous routers (the devices that read packets to tell where they need to be sent) and these routers are often run by numerous ISPs.
The more "hops" or routers your request and the results have to go through, the more likely your service will be delayed or slower or more jittery. Google, Yahoo and other large players can often "peer" with a backbone. That means they negotiate an arrangement in which they do not have to pay to send their traffic to these backbones, and nor does the backbone need to pay them when it sends traffic their way. Peering also means they connect directly to the backbone, reducing dramatically the number of "hops" their traffic must go through. This gives them an advantage over their smaller competitors in two ways: the small competitor has to pay for connections; and they have fewer router hops to push their traffic though, which improves their service from the retail customerís perspective.
Larger portals and content players can also afford to "multihome" in many cases. This means they can afford to either peer or pay for connections to multiple backbones. If one backbone is slowed for some reason, traffic can be sent over another router ñ dynamically routing around the congestion. Again, a large competitorís service is dramatically improved through multihoming. Smaller players cannot afford to pay for multiple connections so their service can suffer backups and slow downs.
Caching is another popular means of improving service. Akamai and a dozen or more caching companies are available to make this work. They locate their caching servers in ISPís "hubs" (buildings where networks and servers are connected together) all over the country. Google and other major content players pay to have some of their most popular content stored in local cache servers, very close to the customer. When a customer clicks to get a popular web page, it does not have to be downloaded from a server that Google has on the other side of the country. It can be taken directly off of a server that may be located just a few miles away. Router hops are eliminated and the service is much more reliable and faster. Google has to pay Akamai for this service and it is not cheap. Smaller players usually cannot afford this performance improvement.
On the Internet performance depends on latest, fastest hardware, but also on having the best software. Some software makes the video applications work and some makes the transmission faster. For example, there are many compression software technologies that make files smaller, and of course a smaller volume means faster downloads. Some companies have developed their own compression algorithms which give them an advantage in the market. Others can buy the best "off the shelf" compression technologies. In either case, compression can help dramatically speed downloads. Some companies can afford the latest compression technologies and others cannot.
Servers are computers and they work at different speeds and have different feature sets. Large firms such as Google and Yahoo have many engineers and can afford to buy the latest and fastest server technology, and manage them themselves instead of having to lease them or outsource that function. Better server technology can mean faster, more reliable service. Again, not all players can afford to buy their own servers and even if they can, they may not be able to afford the fastest and the most modern servers.
All of the above Internet technologies are blooming in a competitive market. The backbones are competitive. The caching is competitive. The ISPs are competitive. The applications servers are competitive and so is broadband. The FCC documented the intensity of broadband competition as of 2005, showing that in 47% of zip codes there are 5 or more broadband competitors and in 60% there are 4 or more broadband competitors. Broadband competition is intense enough to force a continual decline in prices and upgrades in speed ñ hallmarks of a competitive market.
