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ISPs 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. 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.

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.

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