Comcast, Apple wade into the CDN waters

Cable operator Comcast (NASDAQ: CMCSA), which recently signed a peering deal with Netflix (NASDAQ: NFLX) to increase the amount of bandwidth the online video provider can use to reach subscribers on its network, has launched its own content delivery network (CDN) without fanfare. Meanwhile, Apple (NASDAQ: AAPL) is moving forward with a CDN buildout of its own and is negotiating paid interconnect deals with a number of unnamed ISPs, according to StreamingMedia.

The moves put competitive pressure on third-party CDNs like Akamai and Limelight Networks.

While not providing a "fast lane" to commercial customers in the way that its Netflix deal does, the CDN enables Comcast clients to store and have their content delivered via the last mile, a blog post by StreamingMedia VP Dan Rayburn explained.

"While this is the same type of CDN service that other commercial CDNs like Akamai already offer, Comcast can offer a very good SLA and pricing, since they own the network," he wrote.

While fast lanes have been a thorny issue in the ongoing regulatory debate around net neutrality, Apple and Comcast's moves aren't surprising--rather, they're part of a continuing industry trend.

"Much like Microsoft, Google, Facebook, Pandora, Ebay and other content owners that have already built out their own CDNs, Apple appears to see paid interconnect deals as simply part of the costs associated with building out their own CDN network," Rayburn said.

Apple's traffic takes up only 2 percent of Internet traffic, Rayburn wrote, but that bandwidth skyrockets whenever a new operating system for its iPhone is released. Last year, iOS 7 and related app downloads accounted for a spike to 40 percent of network traffic overnight following the operating system's release, he said.

Additionally, Apple's iCloud and streaming services need a boost, according to Jonathan Kizer of 9to5Mac. "iCloud infamously has had performance issues, but it also helps to put servers closer to users. Even with data centers on both coasts, Apple is still a long way away from most of its customers."

But not everyone agrees with Rayburn's analysis that Apple's deals are just part of doing business. GigaOM's Stacey Higginbotham wrote that "the bigger issue is the secretive nature of how content is exchanged on the internet at a time when a number of the significant content and broadband players are consolidating."

For more:
- StreamingMedia has this blog post
- and this post about Apple
- ars technica has this story
- GigaOM has this story
- 9to5Mac has this story

Related articles:
AT&T 'in discussions' with Netflix over peering
Making the CDN easier: Akamai, Wowza look to ease OTT delivery pain
Content and broadband providers put the squeeze on CDNs
Net neutrality debate may be focused in the wrong part of the ecosystem