Interview with Steve Augustino, Partner at Kelley Drye & Warren LLP

April 9, 2007

This week we're bringing you another piping hot, fresh interview from one of our many accomplished speakers at Online Game Development Conference.

Steve Augustino, Partner at Kelley Drye & Warren LLP, offers a fascinating preview of his session at OGDC, Net Neutrality, IPTV, Wireless Broadband and More: A Gamer’s Guide to Broadband Issues, which covers technical, legal and even ethical issues crucial to the online age of entertainment. Definitely worth the read!

Edward Van Duering

EDWARD VAN DUERING: Steve, introduce yourself to us, your background, and tell us what got you involved in broadband issues as a focus of interest?

STEVE AUGUSTINO: I am a Partner with the law firm, Kelley Drye & Warren LLP. I joined the firm in 1996 and I helped to create the firm’s Telecommunications Practice. In my practice I represent all types of communications service providers, such as CLECs, DSL providers, Internet providers, and enhanced service providers. These providers do not necessarily control the networks that deliver their services to their customers. As a result, a core focus of my practice has been navigating these networks successfully for my clients.

I see a distinct parallel between the traditional communications service providers I have represented in the past and online game companies. I developed a gaming specialty in my practice because as online games become more feature-rich and MMO games grow in popularity, broadband connectivity issues become increasingly critical to the success of a business plan.  The online gaming industry should be part of the discussion surrounding broadband, which has historically been dominated by telecommunications and cable companies.

What topics do you plan to discuss at the Online Game Development Conference? And what do you hope to communicate to attendees?

The goal of my presentation is to explore the world of broadband issues that are currently before the FCC and the Congress. I want attendees to walk away from my presentation with an understanding of the importance of these issues to their businesses and their business models looking forward.

In what devices and what areas of communications do you feel broadband will make its greatest strides?

We’ve seen a tremendous growth in broadband over the past few years. In fact, according to FCC statistics, broadband subscribership has increased 600% since 2001. I believe that we can expect to see growth continue at a comparable pace for the near term.

I see the wireless market as having the greatest potential, whether for fixed or mobile applications. For example, wireless broadband in the television spaces has enormous potential. As we migrate to digital television, the broadband spectrum previously used by UHF-TV will be re-allocated to wireless and will deliver the next generation of high-quality broadband services. This spectrum will be auctioned this Fall and it is expected to be the biggest auction in the FCC’s history. In addition, the white space concept also has great potential, in which unused television channels can be used for mobile broadband, pushing videos and games to wireless mobile devices. In fact, QUALCOMM is in the early stages of development of devices with these capabilities. The FCC is currently testing the devices, and such forward-looking companies as Microsoft, Google, Yahoo, and EarthLink, have publicly supported the white spaces effort.

On the flipside, what do you feel represent the most significant hurdles to broadband's growth in North America? Internationally?

Simply put, broadband is extremely expensive no matter where you are on the globe. In terms of the U.S., the greatest hurdle to growth is the sheer size of our country. The U.S. is so big that we have a need for a geographic reach in our broadband networks that other countries do not.

Net neutrality has recently become a hot button topic, in terms of the responsibilities of content providers versus public and legal demands. What are your thoughts on it?

This is an extremely important issue that I fear many game companies are ignoring. Online games are high bandwidth, low latency applications that are extremely reliant on quality broadband services. The rhetoric of the debate up until now has been focused on the extremes of whether services will be blocked or the Internet will be handcuffed in regulation. To me, those extremes are the easy cases. The complexity comes with the broad range of arrangements in the middle where traffic is affected in a more subtle manner. The real issue at hand is identifying the difference between mutually beneficial traffic management and potentially harmful exclusionary conduct. Policymakers are currently struggling to make those determinations. Meanwhile, the potential impact on games is enormous.

VoIP has recently made a big impact in the online gaming world, with the advent of tools like Vivox to add another layer of interactivity in games. Do you think VoIP has hit the ceiling with products such as those, or is there further room for VoIP to grow?

I learned in my practice never to bet against the advance of technology. Without a doubt, there is room for VoIP to grow. I think we can expect features to continue to become richer and to offer more functionality than we have seen in either the telephone or VoIP world. However, as these advancements continue to take shape, there can be unintentional consequences that can impact the gaming industry. For example, the simple fact of adding cell phone support could make games subject to the FCC’s telephone provider regulations, such as the obligation to provide 911 functionality and the obligation to support wiretapping by federal law enforcement agencies.

Do you feel, as time goes on, that the North American broadband market will seem more like the broadband-saturated, online gaming-heavy Korean market? In other words, what are the overarching trends involved?

In terms of the speed of our networks and geographic reach, I expect deployment in the U.S. to continue at a fast pace. On the political side, I expect that there will be a general push to increase rural broadband, which would lessen the variance in access speeds among users nationwide. However, I do not see the Korean market as an apt model for the U.S., because, from what I understand, Korean broadband is driven by the popularity of Internet cafes. The U.S., in contrast, is all about broadband in the living room, not in a public space. 

Think five years ahead. How will the broadband landscape look in terms of the online gaming market? How will gaming shape broadband and vice versa?

I believe the future will bring more broadband options and I foresee a large growth in the number of alternative providers that consumers will be able to choose among for broadband. In the future, there will be multiple pipes into our homes, with the option of choosing between several providers at any one location, as opposed to the one or two options we have now. Another trend I believe we can expect to see is the rise of network owners participating as game publishers and developers. The reason for this is quite simple – gamers are early-adopters and large broadband users. Network owners will want to leverage this demand by creating their own gaming options, either on their own or in cooperation with others. In response, I anticipate that the console manufacturers might re-evaluate the bring-your-own-broadband model they use today. I would not be surprised to see the consoles start to include wireless broadband over a nationwide network they have deployed or with capacity they have leased from another provider.

Lastly, what platform do you feel has the best short-term strategy in the broadband/online gaming market right now: the PC, Wii, PS3 or Xbox 360? Or none of them?

One thing is for certain, all of the companies behind the products you just mentioned are proven innovators with a history of quality products. I would never discount their chances for success. However, I look at the services that Xbox Live provides and I cannot help but be especially impressed. Its platform is phenomenal and I see that portal becoming even more successful in the short term.

Free Newsletter

Join the OGDC update list and receive our free weekly newsletter with all the latest conference and online games industry news.

Premier Sponsors