Uncommon Wisdom

Oct 8 2010   12:11PM GMT

Will Cisco’s Umi gamechanger break networks, policies or both?

Tom Nolle Tom Nolle Profile: Tom Nolle

Cisco released its expected consumer videoconferencing solution with the somewhat cutsey name of Umi. To make things worse, it is supposed to have a horizontal accent line over the “U” to indicate a “you” pronunciation. Whatever the spelling and character set, it’s potentially a significant product.  Umi brings HD videoconferencing to the home TV, and while it doesn’t have some of the social/chat features that Cisco promised, it could still be a game-changer in a number of ways.

Free Internet video calling is already available from a number of sources in PC-to-PC form (Skype and Google), but Umi promises a friendlier form — from the living room on an HDTV big screen via a high-speed Internet connection. If adoption is what Cisco hopes for, it could popularize video calling and generate a ton of new traffic, at a price of $599 for the hardware and a monthly subscription of $24.99. For a router vendor that already has a big market share, organic growth of that sort is a good thing—maybe.

The “maybe” here is that a strong showing for video calling in any form could push operators over the edge into metered usage pricing, which would be a bad thing for router vendors, Internet users and frankly just about everyone. There are many who believe that it’s inevitable (we’re among them), but extravagant video growth would certainly hasten the day. In particular, it could push a pricing change as early as 2011 for some markets, particularly cable MSOs. Because cable operators have constrained upstream capacity, applications like video calling that source as much as they sink, bit-wise, are particularly challenging.

It could also polarize the current public policy debates on net neutrality, mixing billing/cost issues with net neutrality carriage issues. It could be a destructive mix, and we’re likely to see the impact sooner rather than later.

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