Net Neutrality Index
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Created by Barrons
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Date updated:04-07-2007

From the Technology Trader column.

Bill Alpert thinks its only a matter of time before phone companies require an extra payment if you want to get priority on your high-def downloaded video from sites like YouTube or Joost. He thinks the network arms dealers like CSCO and JNPR will benefit but he's also keen on a technology called "DPI":

"But there's a more specific way to play the undoing of 'Net Neutrality: a technology called Deep Packet Inspection, or DPI. Such gear lets carriers look inside the data packets that cross their network, to determine if the traffic is e-mail, video or voice. The network can then control its traffic, facilitating media flows and deprioritizing a BitTorrent node that's disseminating pirated Beatles music.

Many of the DPI vendors' sales have been outside the U.S., where regulators worry less about treating all traffic equally. U.S. carriers have bought DPI devices, but mostly just to know what's happening on their wires. DPI's popularity, however, could leap if the U.S. phone and cable firms can use the gear to generate new revenue by selling special-delivery service for an Internet movie. Every big wireline and wireless carrier in the U.S. has a requisition out now for DPI gear, says Fred Sammartino, head marketer for the privately-held DPI seller Ellacoya Networks, of Merrimack, N.H."

symbol name last price % change open
  • +
  • CSCO
    Cisco Systems
  • $23.82
  • -0.46%
  • $23.71

"The largest DPI vendor, it turns out, is Cisco. The giant networker acquired DPI supplier p-cube in 2004 for $200 million and so Cisco has an inside track on all those networks built from Cisco switches and routers. "

People owning CSCO also tend to own: AAPLAMDDELLGOOGIBMINTCMSFT

TheStreet.com Rating: B- What is this?

  • +
  • SVC.TO
    Sandvine Corp Com
  • $1.36
  • 0.00%
  • $1.39

"Many cable television customers like Comcast and some phone customers enabled Sandvine to double its revenue in the fiscal year ended November 2006, to 32 million Canadian dollars (US$28 million), and almost break even. It expects to reach sales of C$50 million to C$60 million in the November 2007 year. At a recent Toronto price of C$3.50, the company is valued at C$430 million."

People owning SVC.TO also tend to own: AAPLBBICSCOPFERADSIRIUA

TheStreet.com Rating: No Rating What is this?

  • +
  • ALLT
    Allot Communicati
  • $4.20
  • 0.00%
  • $N/A

"But another DPI leader is selling at a bargain-basement price, after warning investors last week that its March quarter sales will fall short of expectations. Nasdaq-listed Allot Communications (ALLT) fell from above 9 to around 7, for a market value of about $145 million. Allot came public in November at $12 and finished 2006 with $34 million in revenue and four cents a share in earnings. It expected sales of almost $10 million in the March quarter, but admitted last Monday that they will probably fall below $8.3 million. Allot blamed its third-party distributors for the shortfall. Yet Allot says that it's doing fine in its direct sales to telecom carriers. Investor relations head Jay Kalish told me that the company is a contender in many of the ongoing requisition plans, with a box Allot is developing that will run at 10 Gigabits a second, like Sandvine's. The product will be available when networks are ready to buy in the third quarter. Meanwhile, Allot had more than $80 million in cash on its December balance sheet, so the disappointed stock market is really valuing the company at about $70 million. That's around 1.5 times this year's sales for Allot, compared with 7 times sales for Sandvine."

People owning ALLT also tend to own: ALYANWBRK-BCECECLNECMVTFTEK

TheStreet.com Rating: C What is this?

  • +
  • JNPR
    Juniper Networks
  • $25.33
  • -2.58%
  • $25.82

"network arms merchant"

People owning JNPR also tend to own: NOKSWKSAECATMLAUYEMCF

TheStreet.com Rating: B- What is this?

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