We’ve talked about this trend often. Experiences are a resource-to-user connection and not a user-user connection and thus don’t demand universal peer connectivity. While in theory, there are many resources available on the Internet, the practical reality is that most of them are found at statistically insignificant rates and contribute nothing to value and traffic—today.

The challenge we now face is whether the profit-driven evolution toward content concentration and experience networking is going to change the nature of the Internet. Is it becoming a big TV network, in effect? How much of what broadband policy is trying to preserve in the way of innovation and flexibility is already being lost to a quiet restructuring? We aren’t railing against the changes, only against the fact that we’re not facing them squarely and talking about the consequences.

Google, for example, is building the most connective resource center on the planet, and with that, it has a jump on any new application, not to mention the older ones. All of the talk about how Internet traffic is growing (Cisco) or how operators’ backbones are expanding (AT&T, Verizon) treats the Internet as homogeneous. It’s not, and how its structure is changing is critical to everyone.

But while digital TV got its start before the Internet became really popular, the Internet quickly achieved all of the goals set for DTV except the picture quality part. The reason for this was that the goals of DTV were never set realistically, that players dragged their feet, that technology suppliers made safe choices, and that the industry wasn’t seen as an ecosystem but as a bunch of independent businesses.

Multiplicity of content for TV? We can’t fund a single version of many shows on slipping ad dollars. Interactivity? Who wants users who pick what they like; we want to feed them what we want. Today, we’d contend that the online world and the core business of service providers are both where DTV was 20 years ago. Let’s hope they find a better outcome.

The tragedy of the current situation is multi-faceted. Silicon Valley is threatened with an unnecessary recession because it wants to pursue vacuous flips instead of more useful and thus eventually more sustainable models. The Internet companies are likely doomed to 50% or more attrition. The telcos are increasingly likely to throw in the towel on monetization and hunker down with bandwidth caps and tiered pricing that will stifle new applications and also stifle investment in equipment.

There is still time (through the end of this year, says our model) for radical action to save the industry from a drudge future. Media outlets are predicting a subscription model for content, and if over-the-top (OTT) players finally realize someone has to pay for stuff, the future for all will be rosier. But with all of this, there’s still a new study that says cloud computing needs open non-discriminatory access to universal communications. Sure, and we all need to win the lottery.

Stanford’s Clean Slate approach and other academic programs are hoping to answer the question, but the problem is that these approaches are academic; the Internet is here to stay in substantially its current form because it would be too costly to fix it.

That doesn’t mean that security issues can’t be fixed. The biggest problems come from the presumption of anonymity; addressing and identification data on the Internet isn’t authoritative, and so you can’t “trace the call” as reliably as with the PSTN. Much of that could be fixed by requiring ISPs to provide authentic addresses for all packets, but that movement hasn’t made headway in the Internet world.

Thus, we believe this is (unfortunately) much ado about nothing, though there may be some incremental steps suggested by the work.

The U.S. decision to aid the auto industry would be regarded by some as a subsidy, again showing that countries will tread carefully to avoid poisoning the free trade atmosphere but at the same time support their own manufacturing sector as a necessary part of economic recovery.

Questions on whether Huawei has ties to the Chinese government and the military (particularly the PLA) have swirled for some time and have now been raised again in financial circles, which suggest that the Chinese giant may plan an IPO.

We believe that the real problem is that there is little BitTorrent can do to rehab the image of P2P, which our research and modeling shows is used for illegal file sharing in more than 90% of cases. It’s ironic the giant of P2P is now suffering, given that the telcos are at the same time looking at P2P signaling architectures as an alternative to centralized signaling systems like IMS. Recent rumors say that operators are researching the use of a P2P architecture for delivering “rich service signaling” without the need for a central signaling system and without the limitations of SIP/SDP/IMS.

We know of no credible reports of slowing IP traffic growth; in fact, the increased deployment of high-speed broadband seems to promise the opposite. However, beneath its questionable main thesis is an essential truth, which is that while IP traffic growth may not be slowing, the IP revenue ramp is definitely slowing. Service providers, like everyone else, invest for profits, and revenue per bit has been declining.

We have seen pitch after pitch from the service providers talking about their strategies for transformation, but we have also heard these same providers tell us that their barrier today is equipment vendors that have not followed up on operators’ published strategies. The trend toward usage pricing and caps, and traffic metering, are all related to the need to curtail costs to match revenue potential. If equipment vendors want to continue to sell gear, they need to step up in the NGN revenue game, not just push boxes.