The Managing Director (MD) of UK business ISP Fluidata, Piers Daniell, has warned that the growing consumer and business demand for "more data intensive applications" (e.g. internet TV, cloud computing services etc.), combined with an industry culture of reducing prices to the lowest possible level, could lead to higher prices for all over the coming year.


Daniell thinks that either the industry needs to go back to a "realistic charge for the speed of a pipe with unlimited usage" or see the general public stomach higher costs. However consumers may have little choice but to pay more; data usage is only one of the factors putting pressure on ISPs this year.

Outside of today's obvious VAT hike, ISPs will also face mounting pressure from Ofcom to deliver on their advertised broadband speed / performance promises. They could also face tougher data retention requirements from the revived Interception Modernisation Programme (here).

On top of all that there's also the now notorious Digital Economy Act 2010 (DEA), which is likely to require the largest broadband ISPs in the market to impose costly new systems to help tackle unlawful copyright File Sharing (P2P) activity by customers. A Judicial Review may have been won against the DEA but we still expect the act, at least in part, to come into force.

Suffice to say that 2011, while a good year for building newer superfast broadband networks, will probably not be the kindest to your pocket.