For anyone who missed it, Comcast laid out a new plan for managing the volume of its network traffic on Friday. (Ed note: Ben normally rants about this stuff, but he’s been swamped, so I’m crimping off an email from him.)

At first glance, it seems as if the new plan clearly violates the principles of net neutrality.

Comcast said on Friday that under the plan designed to give all users their “fair share” of bandwidth it would focus on managing the traffic of customers who are using most bandwidth when the network is congested.

It said it will use software on its network to determine if particular subscribers have been the source of high volume of traffic and will temporarily give traffic from those subscribers a lower priority status.

It said that when a subscriber’s traffic is assigned a lower priority status its traffic could be delayed if the network is congested but would not be delayed if there is no congestion.

Seems like they are punishing their users based on usage. The issues of usage-based pricing models has also been up for debate and tested in other markets by other providers, but will probably turn off heavy users. And what defines a “heavy user” anyway, especially in these days of P2P delivered legal content, Hulu, and streaming from Netflix?

However, upon further inspection and reading, the plan is much closer to what Vint Cerf has proposed - that usage only matters at peak times. If a network is getting close to capacity, and the top 5% are using more than 80% of the bandwidth, thus slowing down the entire network for everyone, the need to manage bandwidth outweighs the adherence to strict net neutrality.

As Ben said, “There needs to be balance between net neutrality and the need for ISPs to manage their networks to provide equal access. If it violates net neutrality then net neutrality is an impediment to quality of experience for internet users and needs to be adjusted accordingly.”

Well said, Ben.

On the same day rumors circulated that Microsoft is seeking to offload Agency Avenue A Razorfish to WPP, they  announced a strategic investment with Move Networks. Both of these are very good moves.

Say you’re Microsoft, the former king of the software biz which is trying to stay relevant as digital invades and transforms media. Old enemy Apple is encroaching on core businesses, won by focusing on usability. Google has beaten them by aggregating global audiences and changing how ads are sold.

What Microsoft lacks focus, they make up for in talent and critical core competencies like scale, global reach and relationships with multi-billion dollar corporations. Microsoft must reassert itself by positioning Silverlight and other key products as the technologies used by mainstream media and major corporations.

By investing in Move, Microsoft gets a partner with which to push their NextGen video technology to major media. Among its partners Move counts ABC FOX, and a growing number of international broadcasters. While currently most Move partners use ON2’s VP7 codec, there’s no reason they couldn’t switch to Silverlight and VC-1 at any time.

It’s interesting to consider the Move-Microsoft relationship in the context of larger working relationships with CDN Limelight, design firm Schematic, as well as Disney, FOX and a number of other mainstream media companies. Together these powerbrokers have formed something of an oligarchy in online video player development and content delivery which could become a front for Microsoft and other Adobe competitors.

Yeah, the title’s pretty bad but I’m coming off of a vacation so give me a break. Microsoft which has already announced numerous content deals for XBox Live this year announced today at E3 that they will will soon offer access to the 10,000 + titles in the Netflix streaming library to existing subscribers.

The blogosphere has been quick to declare this a blow to AppleTV, but the deal is more a case of two companies that were already already in bed together getting a little closer. Netflix has reportedly spent more than $40 million on development to create its streaming service using Silverlight, Microsoft likely fronted a substantial portion of that. Netflix CEO Doug Hastings is on the Microsoft board.

Content will be delivered by Limelight, another company with close Microsoft ties. Microsoft plans to roll out the service when their upgraded XBox live interface is released this Fall.

The service will also have a unique interactive component allowing multiple users to watch simultaneously, useful for when all those guys in their parents basements get tired of Halo and decide to watch Star Wars together.

JumpTV, having failed to achieve profitability on its own after achieving scale through a number of acquistions is merging with well-funded set-top box manufacturer turned online video services company Neulion. It’s a deal that makes a lot of sense.

NeuLion, aided by the close ties of its CEO Nancy Li (her husband is Charles Wang, Computer Associates founder and now owner the New York Islanders) has signed a deal as the NHL’s online video provider, and has had some success in selling a set-top box solution for delivering niche content directly to the TV.

NeuLion is privately (and well) funded by the founders and other unnamed investors; unconfirmed reports say Sky Angel, the televangelist programming network which NeuLion partnered with to deliver IPTV services last year is a major funder.

JumpTV had been on the ropes, losing money at a rapid rate after purchasing a number high value streaming properties, most notably the Broadband Network division of XOS last year for $60 million.

But scale alone does not guarantee success in digital media and the company has been slow to integrate their worldwide properties and find a focus which could drive it toward profitability. Earlier this year the company announced they were exploring the sale of their in-house CDN to lower operating costs.

The combined entitry should be able to capitalize on NeuLion’s smart management, powerful backers, and the combined strength of both companies’ existing infrastructure and content partnerships to create a leaner and more efficient digital media leader.

A call is scheduled for 4PM Eastern today to discuss the deal.

Sad but true. Tonight is the season finale for Lost, and what a season it has been. But that’s not important right now. What is important is what ABC is doing to make their online viewing experience as good as - maybe even better than - TV.

Last week, ABC announced their new video player for the fall, powered by Move Networks, as is their current version. While we’re eager to get a crack at the beta player (hint hint, ABC.com PR folks), their current player is currently the king of the hill.

So before you sit back tonight for the two-hour finale, catch up on anything you’ve missed (minus the pop-up-video-style Cliff’s Notes on the repeats on TV) on the ABC.com site. They’re leveraging a powerful combination of Move Networks content delivery with on2 Technology’s VP7 codec.

At the Streaming Media East conference last week, I had the chance to spend some time with Eero Kaikkonen, CMO of on2. on2 acquired Hantro Products, a video compression software and solutions company, in May of last year. Eero and I spoke at length about codecs and the user experience, where convergence is headed, and the features and functionality that mobile devices will need before they hit their true tipping point. Phones, digital cameras and digital media devices (read: iPods and Zunes) will all need high quality audio and video capture capabilities, plus built in hardware encoding and decoding, so you can plug your iPhone into a 50″ TV and enjoy a high quality, lean-back experience. According to Eero, we’re still a good 2-3 years away before we start to see that technology make its way into consumers’ hands.

So while you wait, plug in your laptop or media center PC to your TV, fire up the ABC.com player, and enjoy the highest quality streaming video available right now. And remember, those few pre-rolls and mid-rolls make it all possible. So don’t forget to thank those advertisers. There’s probably only one for the whole show, so we’re not asking for much.

It was bound to happen sooner or later. UK based CDN Velocix announced they will offer the first free CDN, providing 5,000GB/mo of content delivery for file download, video progressive streaming and website acceleration services at no charge.

Velocix values the service at $8,000 which breaks down to about $.13/GB transferred if the full quota is used. Not bad. Velocix no doubt hopes to lure a few of of the many startups using Amazon’s dirt cheap S3 and EC2 for content delivery. Once companies are delivering more than 5,000 GB and comfortable with the Velocix service, it’s less likely they will leave.

I’ll be honest, I’m not a fan of trademarked terms meant to make something sound better than it is, and MLB’s NextDef is a case in point. But MLB and Swarmcast have created a service that works very well and they should be applauded for it.

No, a 1.2 Mbps stream won’t give you high definition, it’s not going to knock your socks off if attached to a large screen, but it is the highest quality live video currently offered on the internet. In this MLB has succeeded.

Live streaming is a very different beast than delivering on-demand content, and making possible the best experience for so many users with so many different connection speeds is no an easy task. According to the release, “On Opening Day, MLB.TV and Swarmcast delivered over 1.7 million live game streams” Based on that massive number, it’s no wonder there were some opening day issues.

Moreover it speaks to the advantage of having a client-side protocol like Swarmcast’s Autobahn that can measure and adapt to the unique conditions in each users home. While online, every connection is different, Autobahn, ensures that each user receives the best possible experience.

Said Joe Choti, Chief Technology Officer, MLB.com:

“Existing streaming technologies did not have the level of scalability we required and we realized that in order to grow our audience and improve video quality we needed a fundamentally different approach to streaming. Swarmcast presents the only method of delivering high-quality live streaming to hundreds of millions of viewers with the reliability that enables us to grow a business around the Internet as a distribution channel.”

The expansion of Autobahn which had previously been used to power MLB’s Moasiac multi-game viewing option to all games shows that in places where content can be monetized, we are quickly moving toward much higher quality video on the net.

Corey Adds: Not to be a complete hater, I do have to give credit where it is due. While taking the Acela back from Boston last week, I was able to stream the Red Sox game I was leaving behind, nearly uninterrupted. The battle between “lean back” quality and content with any where, any time convenience continues on……

eMarketer points to an Informa Telecoms & Media report projecting $7.9 billion will be spent on “online video and TV services” in 2013, 63% from advertising. The report values the total 2008 market at $4.7 billion.

The Convergence Consulting Group reports: In 2007 “9% of TV viewers had also watched full- episode Broadcast/Cable Network TV online, up from 6% in 2006; we forecast 14% for 2008, 19% for 2009, and 23% for 2010. ABC & NBC were the Broadcast, and Viacom the Cable Network, 2007 online full-episode viewing leaders.” (via YuMe)

ESPN has signed a content syndication deal with AOL. This is ESPN’s first online content syndication deal, and a bit of a break from ABC’s traditional portal strategy. Can ABC / Disney content be far behind? And if they syndicate to AOL, why not Hulu?

Google wants to host your apps. And once they do, they’ll sell ads on them. And once that happens try getting a better deal somewhere else. Scale is the key to monopoly online. Can we start talking about an AT&T style breakup again yet?

.FOX Networks has acquired a majority stake in European ad network utarget. The unit which will be rebranded utarget.Fox reaches 21 million uniques a month across more than 600 UK web properties.

So said Pando Networks CEO Robert Levitan speaking of the collaboration between Pando, Yale researchers and Verizon at the DCIA’s Inaugural Market Conference in New York.

P2P has come a long way since the Napster days. Progress shown by the fact that telcos are now engaging with P2P companies for the mutual benefit of users and business. The need for collaboration was a recurring theme of the conference. Said Eliot Listman of PeerApp:

People think the bandwidth is free…a service provider is providing the bandwidth, content owners are starting to deploy peer-to-peer, however those content owners are now concerned [because the] service provider could block it. All this politics and [talk of] regulation brings to the front that it’s a business relationship that has to grow.

Which is what the P4P Working Group is all about. Back in June of last year, I attended the first New York P2P 2.0 Meetup, organized by Laird Popkin, CTO of Pando Networks and attended by Verizon Senior Technologist Doug Paskin, in which Yale PhD student Haiyong Xie presented his research on the benefit of “Proactive Provider Assistance for P2P.”

The P4P Working Group grew out of the ensuing discussion, a collaboration between ISPs, P2P providers and Technology Researchers to “accelerate distribution of content…and optimize ISP Network resources…to provide the best possible performance to end-user customers.”

Janko Roettgers at NewTeeVee has more on the specifics of the technology, but the short story is that ISPs by implementing a mechanism through which they can communicate with P2P about network status and policies can ultimately benefit from customer use of P2P in a big way.

And the Verizon field trial results are compelling:

• P4P enhanced download rates for FTTH averaged 205% the speed of unmanaged P2P downloads.
• ISP internal data delivery (hop count) feel from and average of 5.5 hops to 0.89 hops.
• Traffic localization within metro locations increased from 6.27% for P2P to 57.98% for P4P enhanced delivery.
• Some FTTH users saw as much as 665% the download speed of unmanaged P2P.

Peer-to-Peer can be done legally, securely and for the mutual benefit of all parties. Thanks to the DCIA and a whole lot of smart people, we are headed toward more intelligent networks that will provide faster performance and a better experience to all users.

As we mentioned last week, lost in the shuffle of the Yahoo! / Microsoft negotiating was Yahoo’s offer for Maven Networks. Today, Yahoo released confirmation that they had, indeed, purchased Maven Networks for $160 million.

The acquisition continues Yahoo’s infrastructure support for delivering and monetizing video. Last week they launched their Lifestream beta, their entry into the personal streaming game.