BT Wholesale is reported to be developing a new video content delivery network for UK ISPs - 'BT Content Connect'. The service would essentially store (cache) popular video content on the ISP's own network as opposed to dragging it over several Internet servers to reach the user; this lowers congestion, cuts costs and speeds up performance.

The Guardian reports that BBC TV, Channel4 and Five are working alongside BT Wholesale and three UK ISPs, including BT itself, Orange UK and Virgin Media , to develop the service. Today’s news claims that Google (i.e. YouTube) is also in talks to share its content with the service.

It's understood that several thousand broadband customers are already taking part in trials of the new technology, which could help to end the bizarre row over who pays for TV/video bandwidth on an ISPs network. The logical conclusion is that the consumer should pay for what they use, although some big ISPs (Tiscali, BT etc.) believe that the developers of such content should pay.

Much as we've argued before, content is what makes the Internet what it is. Some ISPs only have themselves to blame when they can't keep up with demand because their services are too cheap and thus they don't have enough cash to invest in new networks and capacity. For many of those providers the idea of raising prices to help fund new capacity in such a competitive market is almost unconscionable.

However, while the new service might improve the flow of 'some' video content, it will not end the debate over Network Neutrality; a principal of fair, equal and unrestricted access to legal online content. Indeed Content Connect would essentially favor those content producers who have done deals with BT over those that have not. ISPs could then throttle the performance of alternative platforms.

In reality the vast majority of online video consumption comes from services like the BBC’s iPlayer and YouTube, thus most consumers are unlikely to see any negative impact. The niche of remaining video sites and services would probably not cause most ISPs enough hassle to even bother restricting access to them. However it could hamper the introduction of new services, such as online VoD cinemas, especially if they became popular and didn’t sign-up to BT’s content service.