The existing model for the wholesale segment of the ISP business is no longer sustainable in the long-term. As wholesale broadband pricing continues to trend downward, wholesale ISP will continue to see profit margins slide accordingly without new, higher margin premium service offerings.

Retail ISPs are currently forced to absorb an undue expense burden within their backbone delivery costs caused by supporting cheap and “broadband greedy” applications, such as “peer-to-peer” networks. Given that retail ISPs must pay wholesale ISPs based on bandwidth volume transferred and lack new “add on” services to offer their broadband customers to increase average revenue per unit, their bottom-line erodes.

Just as many consumers dropped dial up services in favor of better quality, high-speed broadband at a relatively fast pace (despite increased cost), many consumers will be willing pay their retail ISP for a guaranteed level of service that offers faster broadband speed and improves their online experience, especially when using bandwidth-intensive applications such as video streaming and online gaming.

nuMetra’s technology will increase revenues for wholesale ISPs as MediaGrid service can now be sold to customers across their networks via a straight-forward, incrementally deployed solution. Once wholesale ISPs embed our technology into their respective networks, they can begin reselling the Media Grid service to retails ISPs, which enables retail ISPs to begin offering a new level of service to their current customers and creating a competitive advantage over “best-effort” only providers, thereby gaining incremental revenue opportunities for themselves. In addition, backbone connectivity costs for retail ISPs will be reduced due to more efficient measurement of broadband flows and policies and, therefore, their cost of supporting “greedy” TCP applications (i.e. peer-to-peer) will decrease in lockstep.