Mobile operators fuel DPI market growth, says Infonetics

Verizon stirs up controversy by selling DPI-collected data to third parties
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Mobile operators are increasingly deploying deep packet inspection tools along with 4G services for more granular traffic management and to enable value-added services, tiered services, and improved pricing models, according to Infonetics Research.

For those not familiar with it, DPI is a type of data processing that looks in detail at the contents of the data packets being sent over the network and routes them to the correct destinations. DPI enables service providers to prioritize the data transmitted by bandwidth-intensive applications like video chat and VoIP applications to alleviate network congestion and improve service, as well as to block viruses.

Fueled by its increasing use in wireless networks, Infonetics predicts that the DPI market will grow at a 34 percent compound annual rate from 2011 to 2016. DPI product revenue is on track to pass the $600 million mark in 2012, the research firm said.

Infonetics expects operators to push DPI deeper into the access network and to the device level via enforcement agents that enable greater network and service control on smartphones, tablets, and set-top boxes.

"Traffic management is still the primary use case for DPI technology, but we're seeing a growing interest in folding DPI into larger solutions, such as video optimization, content caching, and usage-based billing. This 'DPI inside' approach provides operators with the visibility into network traffic needed to enable new service models and pricing plans and to support new architectures like software-defined networks," observed Shira Levine, directing analyst for service enablement and subscriber intelligence at Infonetics.

Verizon Wireless (NYSE: VZ) recently came under fire about its use of DPI to collect and sell aggregated mobile usage data to marketers and other third parties as part of its Precision Markets Insights initiative, according to a report by CNET.

According to CNET, Bill Diggins, U.S. chief for the Verizon Wireless marketing initiative, told an industry conference, "We're able to view just everything that they do," And that's really where data is going today. Data is the new oil."

Some privacy advocates argue that this is type of information collection and sale could violate the U.S. Wiretap Act. "I don't see any substantive difference between collecting content from one person and turning it over to someone, and collecting it from multiple people, aggregating that information and then turning the aggregated data over to someone else," Hanni Fakhoury, a staff attorney at the Electronic Frontier Foundation, told CNET. "In the end, there is still a capturing of content from the user at some point--and that's what the potential (Wiretap Act) problem is."

Verizon does give customers the ability to "opt out" of the data collection, which could mitigate legal issues, according to Ryan Radia, associate director of technology studies at the Competitive Enterprise Institute.

Because of its ability to provide valuable information to mobile operators, DPI is here to stay. Whether selling data collected through DPI to third parties violates U.S. law is an issue to be answered by Congress and the courts.

For more:
- check out Infonetics data
- read the CNET article

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