The first taste is free, or in this case, the first 500 GB. Velocix is betting on the free business model bandwagon today by giving away its entry-level CDN service.

The move isn’t surprising as CDNs are engaged in a bit of a price war right now. Om wrote yesterday about new startup Voxel, which is offering an ultra-low-cost service piggybacking off Amazon’s S3.

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The fight for your TV service could escalate as allegations arise that AT&T’s U-Verse is messing with Comcast’s network, according to Ars Technica.

The problems occur when customers combine services — using U-Verse for television and Comcast for an Internet connection. Data travels along different paths getting to the home, but once inside, both use coaxial cable, which appears to be the root of the problem.

Allegedly, some “feedback” from U-Verse heads back upstream, beyond the house, and gets all up in Comcast’s network, disrupting service for everyone else on the node. This could be caused by the two services using similar frequencies or by filters that aren’t working right.

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In researching consumer broadband habits, Om picked up some interesting tidbits from Arbor Networks, which manages traffic flow for ISPs around the planet. While Om had expected to find that peer-to-peer guzzles bandwidth, according to Arbor’s data, P2P applications are responsible for just 20 percent of traffic. Streaming audio and video from services like YouTube, meanwhile, are responsible for fully double that — or 40 percent — of total traffic. Wow, that must be a huge change from a few years ago. Most of the rest of traffic is traditional text and images.

Meanwhile, Om also reported on Vuze monitoring traffic shaping through a plug-in to its software Initial results are available here.

UBS’s John Hodulik, one of the best telecom analysts around, has pegged AT&T as his top pick for this earnings seasons. What was especially interesting in the note he sent out this morning was the progress made by AT&T’s IPTV effort, U-Verse. Hodulik says AT&T added about 135,000 subscribers in the first quarter of 2008, up from 105,000 new subs in the fourth quarter of 2007. Read more on GigaOM.

Digital Fountain, a video infrastructure company that’s been demoing a high-quality video CDN and software package for a while now, has signed its first customer, the auto-racing channel SPEEDtv.

Fremont, California-based Digital Fountain’s new DF Splash is an end-to-end video streaming product. On the consumer side that means an experience similar to what you’d see from Move Networks customers like ABC.com. We’re happy to see competition in this space if it means more flexible delivery of higher quality content.

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Content delivery network Velocix will power delivery of HD content through MediaMelon’s P2P video network. While P2P is great for distributing popular files (lots of “peers” to download from), it isn’t always as speedy for brand-new or less popular files. Velocix is being brought on to speed up these P2P slowpokes and make sure files don’t take too long when downloading.

It shouldn’t come as a surprise, but the online video boom is helping Cisco Systems sell a lot of its top-of-the-line CRS-1 routers.

The San Jose-based router and switch maker said that the total global cumulative shipments of CRS-1 Routers have doubled in less than nine months, rising from a total of 900 units shipped through June 2007 to more than 1,800 units shipped through March 2008. This shouldn’t come us a surprise. It was back in June 2007 that irst signs started to point to video (any kind of IP video) as the savior for Cisco.

Continue reading the full post at GigaOM.

The first casualty in the battle to offer the most HD channels could ironically be video quality. A sharp-eyed poster over on the AVS Forum noticed that Comcast is recompressing some of its HD programming in an effort to squeeze more channels into its pipe. The difference was immediately noticeable when Comcast’s HD was compared with Verizon’s FiOS HD offering.

The result of the compression is degraded image — which is exactly what HD customers are paying for. Here are snippets of the screen shots captured over on the AVS Forum:

Verizon FiOS HD

Comcast HD

This recompressing doesn’t impact every HD channel, but between this, plans to spy on its customers, and slowing down traffic of its heavy users, Comcast is going to great lengths to make sure it angers as many customers as it can.