Q12 - Ofcom are also proposing to clamp down on ISP Fair Usage Policies (FUP) and Traffic Management measures, under the guise of a 'Net Neutrality' consultation. It is expected that this will focus on providers who advertise "unlimited" services and yet hide vague restrictions in the small print, with Ofcom likely to require greater FUP clarity.

Likewise the Advertising Standards Authority (ASA) has also launched a review into the use and abuse of misleading broadband speed and "unlimited" claims. What are your thoughts on the issue of how broadband services are advertised, with specific reference to speeds and usage allowances; how should the problem (if you see one) be resolved?

Answer:
I have personally thought that the whole “fair usage” thing is a con and can’t understand how the Advertising Authority lets ISPs get away with it.  I can only imagine they have been bombarded with arguments by the large consumer ISPs with big legal departments.

In engaging in a debate on Net Neutrality is treading on difficult ground  - every ISP has to have some intervention in their network in order to manage it sensibly. I do believe that if everyone had to be transparent then it would be to the benefit of all. So if someone says “unlimited usage” this should mean unlimited usage and not just unlimited within a certain restricted time window and if an ISP is throttling certain types of traffic then they should be clear to their customers what they are doing.

Q13 - There's plenty of research to show that demand for online video and TV services (e.g. YouTube, BBC iPlayer, SeeSaw) is growing at an exponential rate each year. Some ISPs, especially the largest providers, are finding it hard to keep up with consumer demand and appear fearful of the threat to their bottom line.

The situation looks set to get more complicated next year when YouView (Project Canvas), a supposedly open UK broadband TV standard, finally surfaces. BT Wholesale has already announced a new Content Delivery (CDN) platform to help, although that is unlikely to solve all of the problems.

What is the best solution to this issue and, crucially, can it be tackled without sacrificing the principal of Net Neutrality, which seeks to treat all internet traffic as equal?

Answer:
This is a massive problem for the ISP industry. During the world cup Timico saw a 360% increase in video streaming. At the end of the day consumers will have to cover the costs of the streaming or the ISP will not be in business for very long. The CDN play may help but I haven’t seen the pricing for this yet and it doesn’t sound to me to be a panacea.

The free market will sort this out.

Q14 - At present BT are only offering a 40Mb superfast broadband (FTTC) solution to ISPs through their somewhat restrictive BT Wholesale channel. However some larger ISPs, such as Sky Broadband and TalkTalk, have demanded a more flexible NGA product to help differentiate themselves . One forthcoming solution is Virtual Unbundled Local Access (VULA).

VULA is different from BT's existing physical LLU solution. Physical LLU allows rivals to install their own hardware at the telephone exchange and to even take full control of a telephone line. By contrast 'Virtual' LLU allows BT to retain control over the physical line but provides rivals with more management freedom over the connection.

Do you think VULA, which could exist for four years before a truly unbundled FTTC/FTTP solution is found, will be enough to satisfy ISP demands for greater control over BT's NGA broadband lines?

Answer:
I can only really see BT and Virgin with the legs to be able to service the UK “superfast” fibre broadband market (I hate the term superfast – another marketing hype – what will the next one be?).  Virgin don’t have the cash to properly extend their network and even BT is only doing  it on a limited basis. 

So the only alternative for the likes of TalkTalk and Sky is to piggy back on BT one way or another.  Whether the business case is there for them to take up an LLU play when available I don’t know. VULA may be attractive to them and may be able to provide them with some differentiation (I’m not sure what this differentiation would be)  but at the end of the day I think BT has them nailed down in the ring and looking for a submission.

End.

ISPreview.co.uk would just like to thank Trefor Davies for taking so much of his spare time out to help with this interview. 2010 has been an incredibly busy year with lots of different topics to cover so, once again, thanks Trefor.