Press Releases

Jan 31, 2014

Overruled Net Neutrality Judgment Promotes Innovation and Room for Growth for Telco Systems

The D.C. Circuit Court issued its opinion last week rejecting the FCC’s net neutrality nondiscrimination and anti-blocking rules, citing that the FCC did not have the authority to implement these rules under the Communications Act. The implications of open internet suppress innovation in the industry because it prevents service providers from the freedom to offer different options and levels of services tailored to each customer, thus depriving consumers of choice. With this ruling in favor of service providers, it will cause many of them to grasp this opportunity to offer their customers new differentiated services, and to reposition themselves as a value added service provider, not just a connectivity provider. Service providers will then seek to increase the intelligence of their networks.  Telco Systems is well positioned to help our customers take advantage of this opportunity for innovation in the industry.

What does this mean for telecom customers?

While some are saying that the current standing of network neutrality is not a win for the average consumer, there are many points to the contrary. The new ruling will enable users to buy advanced services to promote enhanced experiences using network dependent services. The ability to differentiate services opens up new opportunities for service providers to deliver an increasing number of services with higher granularity. The value is created by allowing each customer to custom fit the services of their choice, based on a variety of parameters like quality, cost, and availability, among others. It will also expedite trends in the telecom world towards offering more dynamic and elastic services while enabling customers to get the exact services they seek.

What does this mean for telecom industry players?

Today, content providers like Netflix and YouTube are the key players influencing the revenue stream, while service providers are considered pipelines for streaming their content. This leaves no real incentive to enhance the pipelines – it's like drinking pure spring water in rusted, decayed pipes. Under the new ruling, service providers will be included back in the revenue system by driving content providers to re-invest in their network capabilities in order to enhance the services provided, while allowing consumers access to advanced services.

Content providers will also be able to offer end users services with guaranteed performance, instead of “best effort” services that are often seen today. Picture this… you rent a movie from Netflix with two options: $2 for a movie that can get stuck buffering every few minutes (which you’ve probably experienced before), or $3 ($2.2 will go to Netflix and $0.8 will go to the service provider) for a movie that is assured not to get buffered, providing a clearly optimal user experience. With network neutrality, service providers do not have the incentive to offer these services, denying consumers the optimal experience they seek, and networks will not be driven to innovate towards advanced technologies to provide that experience.

How will this affect Telco Systems?

Ariel Efrati, CEO of Telco Systems, explained that, “Given that service providers, mainly at the edge and access, will invest in these capabilities to generate revenue and will reinvest their profits from such services back into their networks, this will immediately boost the business opportunities and revenue of advanced network technology vendors like Telco Systems. A boost of growth is imminent for vendors in this field, with Telco Systems best positioned to make this new offering possible.”

Specifically, Telco Systems’ technology is at the core of such new services, offering advanced flexible and policy-guided switching software capabilities and enabling differentiated and guaranteed services. The only vendors that can really guarantee the performance and enablement of these services are those that are focused on data networking – Telco Systems is the leader in such technology.

Telco Systems is well position to be a leader in the telecom industry revolution. As a fast
paced company, Telco Systems identifies this judgment, together with the SDN and NFV development, as an opportunity for increased growth and faster innovation, and is setting up to pave the way for a new era of innovation!

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About Telco Systems

Telco Systems provides a diverse set of Carrier Ethernet over Ethernet & MPLS-based demarcation, aggregation and edge of the core solutions, enabling service providers to create intelligent, end-to-end, service-assured, CE 2.0-compliant networks for mobile backhaul, business services and cloud networking. The company’s solutions provide
carriers with differentiated services, address new revenue-generating opportunities, and transform the user experience while lowering overall operating expenses. Telco Systems is a wholly owned subsidiary of BATM Advanced Communications (LSE: BVC, TASE: BATM). To learn more, visit Telco Systems at, or follow Telco Systems on Twitter and LinkedIn.


Telco Systems

Moshe Shimon





Zonic Group

Kate Innes

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