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Last Updated: Monday, 13 August 2007, 13:21 GMT 14:21 UK
Net firm warns on web video costs
Channel 4's 4OD launched earlier this year
The explosion in popularity of online video could lead to increases in the cost of broadband for UK consumers.

Internet services providers, such as Tiscali, say that the raft of recently launched on-demand services will "undoubtedly" congest the network.

Upgrades to the net could be needed to ensure services such as the BBC iPlayer continue to work properly, with costs passed on to the consumer, they say.

Alternatively, the ISPs say they would have to limit access to services.

One option that would allow them to do this would be to use so-called traffic shaping.

This involves delaying packets of information sent across the network until congestion has eased.

Tiscali already targets some of its customer's traffic using the technology.

"Peer to Peer traffic is the first to be affected at peak times making downloading slower but not limiting it with any caps," the company said in a statement. "iPlayer traffic would fall into this category, although at present would not be specifically targeted."

BT, which operates most of the net's infrastructure in the UK, said that it continually monitors network traffic and had not expressed any concerns about specific services such as the iPlayer.

Network jam

The last two years has seen a sudden boom in video traffic over the internet.

In addition to popular websites such as YouTube, there are an increasing number of on-demand services, such as 4oD, Joost and Babelgum, launched by traditional broadcasters and start-ups.

If ISPs had healthy margins for broadband, this wouldn't matter anything like as much.
Ian Fogg, JupiterResearch

And unlike YouTube, the picture quality is much higher and the programmes longer.

According to Tiscali, this means that a BBC iPlayer programme, for example, is "at its minimum about 30 times as bandwidth hungry" as a YouTube video.

And it is this that is causing a headache for ISPs.

"Our position is that high bandwidth content services like iPlayer are being launched without proper attention to the cost of delivery," said Tiscali.

"As these services become more popular they will undoubtedly cause congestion. It is only broadband operators that can increase bandwidth and this comes at a cost."

The company is particularly concerned about the BBC iPlayer, which trial launched last month, as it is a free service that could "gain momentum quickly".

Market revolt

The BBC currently dominates the free-to-view content market with 80% of clips originating from the corporation, according to researchers Screen Digest.

Popular programmes such as Hustle will be on the iPlayer

This will fall to about 62% by 2011, as video content becomes more widely available from alternative sources such as Sky.

However, during the same time period, Screen Digest predicts the number of pieces of content viewed across the net will explode from 520.2 million to 2.3 billion.

A BBC spokesperson said: ""We are in regular discussions with the ISP's and together are monitoring the costs associated with video on-demand.

Analysts believe that ISPs have started to revolt about delivering net video because of the fickle European broadband market and because publishers are effectively transferring their distribution costs on to the ISP.

Ian Fogg, an analyst at JupiterResearch, wrote on his blog: "If ISPs had healthy margins for broadband, this wouldn't matter anything like as much. But European consumers are highly price sensitive on broadband access, so ISP margins are poor."

In addition, he said, most large ISPs have launched their own TV services.

"These internet delivered TV offers both push up ISPs' bandwidth and network costs, and they potentially undermine the ISPs' own TV services. So ISPs vocally use the issue of higher costs, while ISPs are also concerned about revenue protection for their TV services."

Tiscali have called for greater discussion about the topic before "it becomes an issue."


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