BBC's net video service has ISPs up in arms

By Stuart Corner
Tuesday, 14 August 2007 01:51

Opinion and Analysis

ISPs in the UK are up in arms over the BBC's new video distribution service that lets people watch recent programmes over the Internet. They claim it is going to cost them by gobbling up bandwidth, but it seems the real issue is that their pricing decisions are coming back to bite them.

It's long been accepted as given that Australia is one of the few countries to impose download quotas. Not so. If you look at BTs' broadband offerings at the low end there are download limits and prices are not dissimilar. An 8Mbps service on an 18 month contract with a 5Mbyte monthly download limit costs £8.95 for the first six months and £17.99 ($A43.11) for the rest of the contract (it includes extras like VoIP calls and access via BT' public WiFi hotspot network.)

However when you get to the high end plans it's a different story: unlimited downloads for £24.99 ($A59.79) per month (£8.99 for the first six months) This is subject to the usual 'fair usage' policy (which BT makes it REALLY difficult to find). There is another 8Mbyte option in between at £13.99/£22.99. With such a small price differential the unlimited download option is likely to be very popular.

BT has denied reports in the UK press that it is one of the ISPs whinging about the Beeb's new video service. The source of most of the reports seems to b another ISP, Tiscali, whose CEO Mary Turner has been reported saying "The internet was not set up with a view to distributing video. We have been improving our capacity, but the bandwidth we have is not infinite."

Tiscali's broadband offerings would make Australians green with envy. All plans include unlimited downloads: a 1Mbps services is £12.99 ($A31) per month, 2Mbps £14.99 ($A35.83) and 8Mbps £17.99 ($A43.02). Like BTs' the gap between low end and high end offerings is  fairly small.

You may recall that Australian ISP Internode - not one that competes mainly on price at the low end of the market - recently moved to jack up the prices of its top end plans offering high monthly download quotas.