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ShareISPs vs BBC iPlayer – Missing the point?

The last month has seen substantial media coverage of the latest row that has erupted between BT Retail and a number of content providers including the BBC. However, we think a fundamental issue is being missed. Instead of BT Retail focusing attention on the BBC et al to contribute to its increasing costs, it should instead be tackling its wholesale provider to reduce the price of bandwidth. Here I explain why this has a wider significance to ISPs and the industry as a whole.

June 2009 proved to be a turbulent month for two of the UK’s industry giants, BT and the BBC. The month began with reports that BT was throttling its option 1 customers’ connections to the BBC’s iPlayer service (and other bandwidth hungry services including YouTube) during peak times, reducing speeds to less than 1Mbps on the advertised up to 8Mbps service. This, according to the BBC, notably affected the iPlayer’s service quality.

Neil Watson, Technical Support Manager

Neil Watson, Technical Support Manager

The argument escalated when the BBC claimed that BT’s advertising of its option 1 package shied away from detailing this level of throttling. Instead it states that the package is capable of 25 hours of iPlayer streaming and only refers to the throttling in its FUP.

By mid June the plot thickened with a request from BT for content providers to pay towards the cost of delivering customers to their sites, claiming that the “free ride for content providers was over”.

“We can’t give the content providers a completely free ride and continue to give customers the [service] they want at the price they expect,” said John Petter, managing director of BT Retail’s consumer business.

Mr Petter continued to explain that the BBC iPlayer was just one of the services involved in this and that the issue was much wider reaching. He continued to explain that an increasing number of content providers were developing profitable business models that are delivered across BT’s network and that they should therefore be prepared to contribute to the costs they were generating for BT Retail.

We disagree! Surely the duty of delivering traffic to such sites falls to the network provider and therefore so should the costs. We think that instead of attempting to consume a chunk of these highly successful business models’ profits, BT Retail should instead concentrate on re-developing its own business models to more effectively satisfy customers’ increasing demand for bandwidth. If its current packages fail to profitably satisfy existing bandwidth demand now, how does it expect to cope as demand inevitably increases? As technology develops further; as access becomes more widespread (especially with the introduction of the USC); and as demand for such services grows, ISPs are finding it more difficult to deliver products that are competitive.

Therefore we believe the argument between BT Retail and the BBC is missing the point. We think the real issue lies with the wholesale provider. Instead of focusing its attention on the content providers we think BT Retail and other affected ISPs should be turning their attention to their wholesale provider, the primary one being BT Wholesale (BTW). As demand for bandwidth inevitably continues to grow, surely it is time for BTW to rethink its existing wholesale bandwidth pricing strategies which appear to be stifling the current market. Basic economics teaches us that, when demand is high and growing, providing bandwidth at lower prices will allow it to generate profit while enabling ISPs to meet customers’ needs at a competitive price.. Surely given its position in the market, BT Retail is best placed to challenge BTW to reduce its bandwidth pricing.

By late June the war of words had received substantial coverage and Outlaw Radio became involved, launching an investigation into the legal standing of ISPs blocking access to content providers’ sites. The findings were surprising – there is very little protection in the UK to stop this practice. Basically, as long as the network operator covers the practice in its terms and conditions little can be done to stop them. A worrying prospect that could spell the end for net neutrality.

Net neutrality is a fundamental principal of the Internet that keeps the Internet uncensored and provides an equal experience to all users. By enabling network providers to block access, in this case to content providers (such as BBC iPlayer) that refuse to pay towards the delivery of the traffic to their site, that particular ISP’s customers (BT Retail customers) could find that they are unable to access that service. If this path is taken a lack of net neutrality could lead to a highly censored Internet and a tiered approach to access i.e. the more you pay the more you can do.

The impact of the BBC’s iPlayer on ISPs’ networks has been raging since the service was launched. So much so that Entanet has already covered it in one of our earlier opinion articles (ISPs vs iPlayer). In fact BT Retail is just the latest to join a number of other providers that have already complained that the service is having a negative effect on their network. Even the call for content providers to foot the bill is not new or unique to BT Retail – just today media coverage shows Tiscali have decided to make a similar announcement.

Reports suggest that in reality, the iPlayer accounts for approximately 7% of peak UK Internet usage and there are many other applications delivering much larger amounts of bandwidth demand. But even if it was higher and the networks were struggling to cope as they suggest, surely the solution is not to punish the development of innovative and popular new services.

If ISPs insist on retaining their existing packages which are often based on outdated usage habits is it so surprising that they are struggling to accommodate the additional costs? Now is the time to adapt and evolve. To develop new broadband packages that cater for the inevitably increasing demand for bandwidth as our usage habits evolve to encompass the new technologies available. And that needs to apply to BTW too. In the absence of a shift in strategy from the wholesaler, pressure will only increase on the ISPs to raise prices to End Users as bandwidth consumption climbs.

So whose side are you on?
We fully support the development of enterprising new technologies regardless of their supposed effect on ISPs’ networks and we firmly believe the responsibility for the network and the costs it incurs lies with the network operator. We fear by adopting BT Retail’s suggested approach, net neutrality would inevitably be compromised and tiered Internet access would ensue.

BTW needs to look closely at its existing business models and investigate how it can redevelop its pricing strategies to encompass this increasing demand for bandwidth to make it easier for its ISP partners to satisfy their customers’ demands profitably.

Have your say!
What are your thoughts on this issue? Do you think BT Retail is right to ask content providers for monetary support for the additional traffic their sites create? Or do you think BTW should readdress its bandwidth charges? Leave us a comment and share your thoughts.

Further reading:

This Entanet Opinion article has also been covered on The Register.

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5 Responses to “ISPs vs BBC iPlayer – Missing the point?”

  1. I have often wondered – indeed it goes back to the £10-a-month-plus-BT-phone-cost days – whether ISPs sometimes actually want to have data transported over their links, or just want to ‘be there’. People don’t leave their water taps running 24/7 etc but many of us seem to want fast dependable internet connections 24/7. As a customer of both cable and ADSL (via Entanet, as it happens) I use each connection in the way it is best suited, but probably not predictably. An ‘on demand’ service is required, but so unpredictable that the old contention issues are replaced by demands for fatter pipes.

  2. What I find most laughable about this post is that you are quick to point the finger about BT – at least their network runs and wasn’t working with SPOFs for months!

    AND at least they then admitted what their Option 1 customers could expect unlike your rather shoddy ALT system.

    Is it any wonder why Enta’s resellers are sheddings customers? No.

  3. Hi tom.w

    Welcome to the opinion site and thank you for your comment.

    In the article we’ve made no criticism of the BT network – you’ll see we’ve specifically commented about bandwidth pricing and the impact this has on ISPs, resellers and end users.

    As regards our own network, the issues were well documented to all of our Partners and are also now resolved. Explanation of the ALT meanwhile was also explained to Partners as well as being made available on the Entanet e-billing site. If you would like clarification as to how it works please speak to your account manager.

  4. Hi Chris,

    When did I say you did? What I was saying is that at least they, when asked, explained that Option 1 customers would have degraded service.

    Your posts seem to attack, or at least, belittle other providers yet it is Enta that had a network that had several 6+ hour outages and due to your network topology at the time, caused many of your resellers to have headaches with the amount of customers complaining.

    We’re fully aware of the ALT – but just take a peek at ADSL guide as how satisfied your reseller’s end users actually are.

    There are other providers out there and your customers are clearly voting with their feet. Just take a look at some of your larger resellers like ADSL24 and UKFSN!


  5. BT retail are dinosaurs they want you to have broadband but not to use it….when you do use it they throttle it,customers should shy away from using BT retail or plusnet because they actively throttle protocols that they dont like.They just keep hammering more people onto the existing pipelines which is only good for their share holders.

    As has been said they should be pursuing their supplier BTw who are allowed by Ofcom to aggressivly overcharge what should be the going rate .

    I understand why this was done originally but with many exchanges now at capacity the LLU take up for many of us will never happen, so we are being fleeced for no reason.

    BTw on the other hand appear to have a business strategy of drip feeding upgrades in speeds without making huge changes to bandwidth allocation this is just choking up the already full system.

    No private company is ever going to make the necessary changes and this is where so perhaps Government should step in build the network and sell it off to the highest bidder,i dont mind the 50p tax so much if this was going to be the case where those of us who are charged the same or more than in the cities were to see some progress but like all Government IT programs it is doomed to fail due to an inability for them to only listen to the concerns of the big business’s and only back their proposals.

    The technology is available tried and tested we all know what is required it just needs the investment,Government are keen to tell us when they are investing for the future,well lets see them use some of that not inconsiderable VAT revenue they have collect off most of us over many years to replace that piece of copper with technology more appropriate for the 21st century not the 19th century.

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