This just sounds bad. On the surface you might think that Qwilt, a startup that was recently funded by Accel Partners, Redpoint Ventures, Crescent Point Group, RealNetworks founder Rob Glaser and other investors, has some really good ideas. Their technology is said to allow network operators to determine video traffic and then shunt it to its own video delivery layer. Sound great right? Could mean better video delivery with more quality and faster speeds, no?

However, you have to look at it from the consumer standpoint. Again, faster streaming and higher quality video sounds great.

But Internet providers have already been trying to find ways to limit our bandwidth usage and charge us for more and more to maintain or expand profit margins. So I can see this technology  turned to evil very quickly.

Good vs. Evil in Online Video

Providers like Verizon and AT&T have already announced that their unlimited plans have bandwidth caps, which really seems counter-intuitive to me, so what’s to stop them, in this very corporate friendly federal government climate, to decide that video traffic should be charged at a higher rate? Even though, when it comes down to it, all data is transferred in exactly the same way and in exactly the same format, zeroes and ones. But never mind the infallible logic that all data transfers the same, we’re looking at a worst case scenario here.

This technology could be used for good, but it could just as easily, be used for evil, much like my super powers.  What Qwilt says is that the technology helps Internet-service providers more efficiently and cost-effectively deliver high-quality video to their customers.

Sounds great right? It would help offload those massive usage spikes at prime time when Netflix users are hoarding the bandwidth, which they pay for, and should be able to use. But, apparently, the infrastructure can’t handle all this bandwidth being used simultaneously, which the likes of AT&T and Verizon never bothered to take into account when they started selling everyone 24Mbps lines with unlimited usage.

Right now, video takes up some 40% of all Internet traffic (ya us!) and is expected to be around 66% within the next four years.

So now, with Qwilt’s tech, which can be used by carriers to identify, monitor, store and deliver Internet video, the network providers will see that you’re streaming a particular video, create a full version copy closer to you through their CDN or a 3rd party one and then switch your stream from the origination point to their copy?

Whoa, hold the DSL line. They’re going to usurp control of your stream and then switch sources? Here’s how I see this going poorly for consumers.

#1 Video Stream Surcharge

Network operators will know exactly how much video they are serving you. That means they will be able to segregate that usage out and then bill it at a different rate, even though, as I said before, it is all transferred as zeroes and ones. They can then say that because of expanded overhead, for the Qwilt technology license, the separate storage and streaming servers, etc. they need to charge you more. After all, they have to recover their operating costs right?

Worst case scenario here? They disallow all video streams, and make you pay for an add-on to your network contract so that you are then allowed to stream video. Since video is 40% of Internet traffic right now, I don’t see that flying, but who knows. Maybe they’ll say that it’s a whole different network and that you have to pay for access to that network.

Of course, they would never allow someone to just have video streaming and not the regular internet connection. After all, you need the hardware for it either way. It’s a stretch really because it would be a total scam unless you had two separate lines running to your house, that never intersected and they’re not going to be running new lines to everyone anytime soon I’m sure.

#2 Speed Fees

Here’s another option they might try. Since, again, they can segregate out the video bandwidth from the rest they can say, “Hey User 12345678, we see that you are streaming some video. For $5/GB we can boost the speed on your video to 28Mbps which you will need for perfect 1080p streaming.” A speed which you’re actually, already paying to receive most of but almost never achieve. I used 28Mbps because it’s a good 1080p bitrate, though Blu-Ray gets up to 40Mpbs. So now they’ll be saying things like this:

In order for you to enjoy full Blu-Ray quality streaming video, you need to have our speed booster package which will cost you $40 a month (regardless of how much you actually stream 1080p Blu-Ray quality video).

#3 Stream Sniffing

What if you’re streaming from a DLNA server you’ve got at home, or a friend has at their place. With this technology, they could start sniffing out what kind of content you’re watching and limit/block/track what it is you are watching. Very Big Brother of them really. So say your friend has a DLNA server and you’ve got access. There are many of us that do it I’m sure. My friends have some stuff that I don’t and so I can get access to something I want to watch and not have to buy it. It’s no different than going to their house and watching it on their TV, is it? Well, except for the fact that the bandwidth then doesn’t leave their LAN.

So say a friend DVRs a show on, HBO let’s say, and its on their DLNA server which you have access to from remote. You then stream that show to your place and are enjoying it when the stream stops and the following message shows up:


You are in violation of (some obscure item in their Terms of Service)
This video stream has been intercepted and reported to the proper authorities. 

Later that week, you are served for copyright violation and are to appear in court where a corporations high-powered and high-priced lawyers are salivating to take every single penny you have.

Yet, in essence, it was no different than going over and borrowing a VCR tape of the show they made or watching it at their place with them, was it?

#4 Peer-to-peer be Gone!

Peer-to-peer has a lot of advantages and a lot of legitimate uses, even in video. Yes, I know there are a lot of illegal uses as well which I don’t condone. But for the sake of argument I’m sticking with the legal stuff. Any P2P traffic that their system deems as video could simply be shut off or disallowed because they are too lazy to determine which video streams are legal and which aren’t. Additionally, you generally don’t know where the streams are coming from in P2P and one single bad egg, so to speak, could rot the whole lot.

#5 Ad Override and Injection

Sure, this might be a bit far-fetched for content coming from Hulu who already shows ads, but what about Netflix, YouTube and other video sources that aren’t showing so many ads on their content.

Because of the Qwilt technology they could simple pre-empt your video stream and inject their own advertisements. You might not even notice at first. You might think, oh, Netflix is showing ads on things now? How weird. But really, it’s the network operator who is doing so and injecting ads into your video viewing that can’t be skipped, can’t be tailored to you and can’t be removed. They reap all the benefits in this situation since they will have a good deal of new ad revenue being generated, and they’ll probably still be charging you more for the video-specific bandwidth you use.

Qwilt May Smother Online Video

In fact, all of this is exactly what Qwilt is founded on and is why it drew in such big name investment capital. Look at this paragraph from their website:

Qwilt gives operators a unified platform to control and monetize online video delivery in their networks. With a single, cost-effective platform that slips easily into their networks, carriers can now identify, store, monitor and deliver online video to their subscribers at scale. The results are improved video quality of experience, cost containment, and the potential for new monetization models.

Now to be fair, I also have to mention all the ways I can see this benefiting the online video viewership.

#1 Better Quality Video Streams

Everyone has encountered the stutter stream shuffle, right? You get a video streaming but not fast enough to watch without interruption and so it pauses and buffers. Since you’re streaming and not progressively downloading, there’s nothing to do but wait for it to buffer where, with progressive download, you could go back and re-watch something.

In the background, when they are preparing to stream a video to you, they might initiate a remote copy of the content to a server closer to you so that there’s not as much long-range network congestion. It makes little sense to me because they would use bandwidth to transfer the video to a cache server, and then stream that to you effectively doubling bandwidth usage, but it could happen I suppose. They might even wrap it up in simple “infrastructure updates” and just spread the cost across all of their subscribers.

#2 Make those Video Hounds Pay!

Not the Hound that reads ReelSEO, but all the hounds that do. Every single one of you has a vested interest in online video, or else, why would you be here in the first place? There are also those who don’t watch video online at all (we call them the Amish) who don’t want to pay more for their Internet and feel that they are unjustly saddled with high Internet prices because of those of us who watch video online (and probably outnumber those others some 3 to 1). So why should they pay just as much as us when they don’t watch video online?

On Second Thought

 …helps contain the cost of growing online video traffic while keeping their options open for future business models leveraging the video delivery layer…

That does not at all make a good point for those of us involved in the online video industry because it could mean two things:

A) We will pay higher Internet prices to make up the lost revenue from those people.

B) Those people will never be reachable through Internet video advertising and marketing because their connections will have video streams blocked at the network operator level.

C) Websites, publishers, video ad networks will lose revenue because the video ads would be blocked. No ads means no revenue even though they’re still coming to your site and getting your other, non-video content.

Doom and Gloom!

Alright, so that was really, the only good point I could find before I rethought it. Apparently, Qwilt shares all of these misgivings because this is the type of stuff on their site:

Mobile and fixed-line operators struggle with growing online video while network infrastructure costs mount.  Without effective solutions, video quality will degrade, glitches increase, and prices rise – the entertainment revolution could stall.

See, and you thought only I have a flair for the dramatic.

Carriers aren’t the only ones who benefit from the Qwilt products. At the end of the day, any online video solution must address the needs of all three parts of the equation: content providers, service providers and consumers. As a verb, the word “quilt” means to stitch together different layers. At Qwilt, we are trying to create solutions that work for content providers, service providers and users in the video space.

I agree. All three layers need to benefit. But knowing how much anti-consumer legislation has been pushed through by the corporations that would use this technology, I don’t see it being all that beneficial to consumers. Neither does Qwilt because really, of all the copy on their website, that one sentence above, is the only time they ever address the needs of the consumer, and they do that in just a passing remark.

Then again, perhaps Qwilt is just a sign of the times. When AT&T and others gave us all these 24Mpbs access, they never in their wildest dreams thought we would actually use it. They priced it so that we would only buy it if we needed it and have reaped massive benefits and profits from it.

Now, we’re using it and that scares them. They didn’t build the infrastructure to support that much bandwidth being pushed out, they oversold the plane and now there could be people without seats, to tie it to another industry with massive anti-consumer moves of late. They’re scrambling to figure out how to get back to those massive profit margins and the streaming video viewers are going to probably take the hit. We will, one way or another, start paying more. You might lump video gamers in there as well which are another notoriously high-bandwidth hobby.

Instead of making moves to boost their infrastructure bandwidth to accommodate our usage which they sold us, when the usual bottleneck is the last mile, the one that runs to your house, they are trying to find ways to limit that with bandwidth caps and arbitrarily drawing a line between video and other forms of data… and they will probably get away with it.

Perhaps instead of looking at ways to monetize more on an infrastructure that apparently has numerous flaws in it, they should look at new ways to get that data to the consumer. Intel and Cisco have sponsored some research to do just that. While that project, in particular, is mostly aimed at wireless and mobile networks, it could easily be applied to any network transmission of video data. Cisco, for their part, has already talked about new, massively powerful routers to help unclog things so it’s no surprise that they’re also taking another approach as well.