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Timico UK ISP Tech Chief Fears Higher Broadband Prices Due to Video Usage

Posted: 09th Jun, 2010 By: MarkJ
online video net neutralityThe Chief Technology Officer for business ISP Timico UK, Trefor Davies, has warned that if internet bandwidth usage trebles over the next two years then the wholesale cost to ISPs would have to drop by 66% in order for prices to stay still. However Davies warned that this was unlikely to happen while BT, the "near monopoly, is still around.

The result would therefore be a situation where many broadband providers, in particular those who advertise vague "unlimited" download allowances, would either need to raise their prices, restrict more access to bandwidth or start prioritising specific traffic (i.e. content providers who pay ISPs would be given priority over others).

The forthcoming Fifa World Cup 2010 tournament is expected to be a good test case to see how UK ISPs cope with a predicted rise in video traffic for a sustained period of time. Football fans won't just watch England games, which will put a huge amount of pressure on the UK's existing internet infrastructure.

Trefor Davies noted:

"ISPs have been speculating as to what might happen during the tournament itself and especially on June 23rd which is England’s first midweek daytime match. At the recent LINX meeting in London it was suggested that the BBC is forecasting a huge increase in demand for iPlayer, a system which had itself been unable to cope on the Friday following the 2010 election polling day.

All ISPs will have to cope with the demand in their own ways during the World Cup and I’m sure that many will not cope, although it will be difficult to tell whether it is the ISP’s own network, BBC iPlayer or the local telephone exchange that is suffering from congestion."

Davies also included some interesting stats to accompany his blog post. At Timico video represents roughly 25 – 30% of daytime bandwidth demand, which is lower than some consumer ISPs, most likely because Timico is focused towards the business market. The average video stream seen by Timico is around 0.8-1Mbps, though an HD video from the BBC takes approximately 18Mbps or 20x the current average.

Trefor Davies added:

"Only people with FTTC [40Mbps] type broadband speeds will be able to stream at these rates but if all our users were doing so then potentially we would have a scenario where we will need up to 7 x the currently required total bandwidth to support our broadband customers.

BT is saying that by 2012 it will have 40% of the population served by FTTC enabled exchanges so within two years there is an extreme scenario where 40% of that 7x bandwidth multiplier could actually be used, or 3x that of today. All because of HD video. These figures are very rough, back of a fag packet but they are probably not a million miles off the mark."

Davies also notes how recent historical trends suggest that internet bandwidth usage has been growing by 50% a year, which could be blown out of the water with the advent of more HD video usage over a new generation of faster fibre optic broadband connections. The question then becomes, "How much do we think consumers would be wiling to pay for this extra bandwidth? Based on track record not much I’d say," concluded Davies.

The issue of who will pay is a highly contentious one, which has been doing the rounds on this site for at least two or three years. BT and several other large UK ISPs have often, perhaps mistakenly, attempted to tackle the problem by attacking content producers directly. In June 2009 BT warned the BBC that content owners "can't expect to continue to get a free ride" (here).

This is perhaps the worst possible way, especially from a PR angle, of approaching the problem. To place blame upon the people who produce content, those who actually make the internet a fluid and interesting place to visit and are the reason we all want access to it, is potentially very ill judged.

The big problem is that this perceived separation of access from content doesn't just stop at video. Some ISPs have talked about charging internet search engines for passing content over their networks (here). European mobile operators have even threatened to charge bandwidth-intensive services (e.g. Skype) for the privilege of running data over their Mobile Broadband networks (here).

Here in the UK any notion of Network Neutrality (treating all traffic as equal) has long been sidelined because of Traffic Management policies. Many ISPs employ this as a means of improving the overall performance for everybody by reducing the speed to busy services like P2P, gaming and or online video streaming. In the future we could see even more aggressive forms of this.

Part of the problem is that some ISPs have simply been unrealistic in what they advertise (i.e. "unlimited") and the prices they charge for that. We do also expect that there will need to be some agreements between content produces and ISPs to help balance the load, but what we don't want to see is ISPs restricting access to all forms of content except a handful who pay them. A line has to be drawn somewhere to protect the internet and evolving content from being given a chance to flourish.

Happily it's not all bad news. Some operators and content creators are developing new delivery networks that should help to tackle the problem. Most of these simply identify popular content and move it closer to the ISP (a more sophisticated internet cache), which saves on bandwidth costs. But, as Trefor Davies says, at the end of the day the old saying is still going to hold true: "You get what you pay for", but what are you willing to pay?
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