Analyst Telco 2.0 has used a preliminary analysis of BBC iPlayer (IPTV) traffic from Plusnet to model the cost impact upon the wider market for UK broadband ISPs. The results suggest that iPlayer could have a far more detrimental impact upon providers than previously thought.

Firstly it's important to highlight Plusnet’s original and quite excellent summary of iPlayers impact since its Christmas launch at the end of December 2007 (here). The highlights were as follows:


Using this data and a rough customer base total estimate of 282,000 for Plusnet, Telco 2.0 predicts that the introduction of iPlayer could equate to an increase in costs for IPStream (BT based) ADSL broadband providers to £1.5m in January from 500k. The option for the ISP is either to allow degradation in performance or order more capacity:


Telco 2.0 suggests that the BBC may need to consider paying an "equitable fee to the ISPs for distributing their content", while the ISPs would then offer unlimited BBC access. Part of this is because UK licence payers expect they paid for both content and distribution when they handed over the license fee.

However, the market has more than just one ISP and setting up such an arrangement so that it is fair to all may prove problematic. It could also set a dangerous precedent for similar situations in the future. One other solution would be for the largest providers to adopt a more realistic level of pricing but that is unlikely given the high levels of market competition. Telco 2.0's full report can be read HERE.

In related news, the BBC may drop its FLASH (web-based) iPlayer in favour of an alternative solution so as to improve the services video quality.