Will Cisco’s Ume Break Networks, Policies, or Both?

Cisco released its expected home videoconference solution with the somewhat cutsey name of Umi, which to make things worse 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-PC form, but Umi promises a friendlier form, from the living room and on a big screen.  If adoption is what Cisco hopes, it could popularize video calling and generate a ton of new traffic.  For a router vendor who already has a big market share, organic growth of that sort is a good thing—maybe.

The “maybe” here is that it’s very possible 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, and in particular it could push a pricing change as early as 2011 for some markets, particularly the cable MSOs.  Because these guys 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 neutral carriage issues.  It could be a destructive mix, and we’re likely to see the impact sooner rather than later.

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