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BT suggests a charge for video content
Thursday 11 June 2009 10:59:06 by Andrew Ferguson

Video over an Internet connection is hardly new, back in the dark ages of 2000 there were places where 300Kbps video streams could be found. In 2009 we now have a myriad of totally legal video sources, some in the UK and some hosted abroad, offering video at a wide range of qualities.

BT according to the Financial Times is attempting to call an end to the 'free ride' that it perceives video websites have had. The FT article specifically mentions the BBC iPlayer and YouTube, but there are many other sites offering video which, while not as massive, still contribute to the peak time traffic load.

"We can't give the content providers a completely free ride and continue to give customers the [service] they want at the price they expect"

John Petter, managing director of BT Retail's consumer business

It seems BT has seen what it feels are very profitable business models for delivering content to its BT Total customers and now feels it deserves some of this profit. This seems an odd stance given the presence of BT Vision which surely should be popular to BT customers and generate profit for BT, unless customers are finding content they prefer or of better quality elsewhere.

The FT article appears to be the next round in the ongoing BT Option 1 throttling war of words, which we first covered in February 2009. The BT website still claims that Option 1 is good for 25 hours of iPlayer content, with no direct link to the throttle condition. On the product page description of the 10GB allowance of BT Total Option 1, they claim that Option 1 is best for:

  • Up to 8Mb download speeds
  • Wireless broadband throughout your home
  • Internet surfing and emailing
  • Downloading 2,500 music files, 14 videos or streaming 25 hours of iPlayer every month

If BT Retail is finding the use of video streaming is too high, perhaps the product descriptions should change to emphasis that customers might be better off on a more expensive product. Billing the content providers will be a very messy affair, and in the case of the BBC could see them deciding to firewall the BT IP block rather than pay the money from the licence fee.

One serious side effect if BT Retail was to create a network where the provider pays for carriage and the consumer pays to view, is that the consumer may look for the video from other sources, such as downloads from websites or peer-to-peer networks, thus creating an even larger problem than there is now with peer-to-peer. Of course providers can throttle peer to peer (BT Retail does already) and given the legal status of much of the content, people do not complain en-masse.

The crux of the matter behind all this, is that the cost to carry a megabit of data is high for BT Retail in comparison to the costs Sky, O2 and other LLU operators have on their own networks. This is a deliberate situation set-up by Ofcom to ensure retail competition in the market, prices are due to reduce slowly as the 21CN network comes online, but currently the reduction in cost per megabit does not appear to equal the rising demand for bandwidth at peak times.

Broadband providers have generally promised us the UK public a lot and got us used to low prices. The question is will we, as we make broadband a key part of home entertainment, be willing to pay more if we don't accept that networks may become slower at peak times, or the amount of legal content will decrease as the content provider makes up the short fall in costs?


Posted by herdwick over 8 years ago
BT have a particular issue in that they have a subscription video service (with end to end QoS) that effectively competes with the iPlayer et al. The free (licence fee funded) iPlayer carrying the same stuff as they're trying to sell via BT Vision can't exactly help their sales.

BT Wholesale costs per Mbit/s might be twice as high as LLU but the issue is the same there - can a "free" LLU broadband product sustain extra backhaul costs as demand rises ?

Nothing that wouldn't be fixed with price increases :-)
Posted by cyberdoyle over 8 years ago
its just a ploy because the current infrastructure can't deliver what the people want.
Posted by andrew (Favicon staff member) over 8 years ago
At present average usage levels, LLU can work, if the year on year average usage continues to rise and backhaul costs remain static then the same fight will appear elsewhere, unless this is purely posturing from the old encumbent
Posted by TonyHoyle over 8 years ago
Clearly their pricing structure isn't working. If they stopped trying to claim 'unlimited' and actually charged for bandwidth there would be no problem with whatever anyone wanted to stream, or p2p or whatever.. heavy users pay more, light users pay less.

Either that or they increase their monthly cost to cope. It isn't the consumers problem that they're undercharging and overselling.

How do they think they're going to get this money? Maybe the BBC may pay something toward iplayer but Youtube are US based and big enough and important enough to tell BT to F off.
Posted by c_j_ over 8 years ago
"BT Wholesale costs per Mbit/s might be twice as high as LLU"

That depends very much on where you are. If you look at end user prices in cable/LLU areas, people like Plusnet who do regional pricing are actually reasonably competitive with O2 etc.

Give the LLU folks a USO and the picture would change dramatically.

"can a "free" LLU broadband product sustain extra backhaul costs as demand rises ?"

The answer is obvious.

"actually charged for bandwidth"

Dangerous talk, that!
Posted by GMAN99 over 8 years ago
"its just a ploy because the current infrastructure can't deliver what the people want. " And if it can't someone should be paying the bill surely? Networks can be upgraded but it has to be paid for by someone. Networks and bandwidth aren't free
Posted by AndrueC over 8 years ago
@Tony:Yup, pricing structure is the issue. Unfortunately BT can't go it alone. The industry as a whole needs to change. I say Kudos to BT for breaking ranks in taking this public. Negative marks for threatening to charge the provider.

The entire industry needs to rethink how it presents BB to the public and how it charges for it.
Posted by GMAN99 over 8 years ago
Trouble is.. BB is so cheap now and joe public is used to it being cheap and want it even faster for the same price or cheaper. They won't understand why they have to pay more just because youtube and iPlayer is on the increase
Posted by shaunhw over 8 years ago
Youtube etc. already pay for their outward bound traffic to the Internet. How much bandwidth do people think they would need for all the data being transferred from their servers ?

If I post an email message, or someone views my web site, I pay for the cost of the upstream bandwidth to the 'net. I don't pay the viewer's download bandwidth cost too!

P-P is different, but upload costs should be paid for by those customers using it. Often BBCi material is uploaded to BT customers from ELSEWHERE, and BT clearly don't pay for that.
Posted by mikeblogs over 8 years ago
We need to start with transparency on the peak hour allocation per user. I reckon it's 20-30kbps per user.

Step 2 is to provide the user the means to prioritise data streams.

What is not acceptable is BT telling us we cannot use our connections as we wish, when they refuse to tell customers what resources they have allocated to each user. more detail here
Posted by GMAN99 over 8 years ago
"Step 2 is to provide the user the means to prioritise data streams." That's fine (and available on some routers) but it doesn't really mean anything when it gets into the core unless end to end QoS is in place
Posted by Dixinormous over 8 years ago
Minimum performance guarantees on services as cheap as we have now might well be tricky. The aims are good but people probably aren't prepared to pay for it.

There are people paying as little as 70p / Mbps / month on their home service who jump up and down as soon as they can't hit max speed at peak times.
Posted by chrysalis over 8 years ago
BT showing its true colours, this very statement conflicts with what the internet is about. The video content providers such as youtube already pay for their transit its not something that is free for them, to BT the video content is just more data going over their transit. It seems BT are making an admittance that their business plan isnt viable and something has to give, the actual solution would be to increase their own retail prices or negotiate with BT wholesale to reduce the very high wholesale prices. We have the talktalk CEO who talks sense and BT who havent a clue.
Posted by chrysalis over 8 years ago
To clarify what I mean by BT showing its true colours, I have long thought BT considered the internet to just be a web browsing and email service, I imagine those in the board room feel angry that people using p2p, video streaming etc. are getting something that should be charged seperate and it seems greed has overcome them to make this statement. The flat fee model as soon as possible will be abandoned by them I feel, whether it be PAYG or some sort of tiered charging depending on content. If they did do this BT would be the first isp worldwide to do this kind of thing (again).
Posted by chrysalis over 8 years ago
The more I think about it the more I feel BT need to completely reshape their product portfolio, the problem with not charging for burst speed is it allows someone to pay for a minimal package and use it for just about anything, the only restriction been the amount of times they can use it, if BT's base package eg. was 0.5mbit it would likely force people to upgrade to a higher speed so they can use video streaming better and as such more revenue to pay for transit.
Posted by bosie over 8 years ago
I hope the solution turns out to be a simple fixed price structure. Impossible to satisfy everyone; just make the price enough to accommodate today's usage and state clearly in the contract that prices may vary with early release for those who don't want to pay. We all knew last years price cutting would end up here so let's get it right and concentrate on rolling out a better internet instead of squabbling over usage. BT are their own worst enemy, ridiculous.
Posted by Rroff over 8 years ago
So basically BT has badly mis-managed their business model and infrastructure and wants to blame someone else?
Posted by cyberdoyle over 8 years ago
you can't get what you want through the copper network, it isn't possible. we need fibre to the home, or fibre to the cabinet at the very least. The internet will continue without us, and digitalbritain will be left behind with the phone lines, an obsolete legacy network that has served us brilliantly until some bright spark decided to use it for video...
Posted by cyberdoyle over 8 years ago
by video I mean real people using and uploading/downloading vids, streaming Iplayer and doing all sorts of interesting web 2.0 apps. not the tiny window videos of the past...
Posted by browney over 8 years ago
I think that sky's pricing is shocking they sell there broadband too cheap.
Posted by radiomarko over 8 years ago
It's a new opportunity for expanding the "BT-Runaround" (tm) scope, just imagine the billing accuracy!
Posted by andrew (Favicon staff member) over 8 years ago
In response to "you can't get what you want through the copper network" - replacing the copper with fibre will not fix this sort of issue, which is down to the price per Mbps that the link from exchange to POP is, and that is already fibre.

As for bright spark and video, video has been around for many years on the internet, so hardly new.
Posted by Rroff over 8 years ago
IMO its as much the fault of the consumer as it is BT - every one wants something for nothing... if the "unlimited" packages were a little bit more fairly priced I'd hope we'd be in a much better situation.

Rather than congested and throttled left, right and center.
Posted by rian over 8 years ago
BT is gone crazy now and starts looking for more MONEY!
Posted by GMAN99 over 8 years ago
"I have long thought BT considered the internet to just be a web browsing and email service" - It was and has been for years, just not now that's all :)

"In response to "you can't get what you want through the copper network" - replacing the copper with fibre will not fix this sort of issue, which is down to the price per Mbps that the link from exchange to POP is, and that is already fibre." - As I also keep saying but he's obsessed with his copper witchhunt :)
Posted by AndrueC over 8 years ago
@cyberdoyle:"you can't get what you want through the copper network". The only part of the network that is still copper is the end-user bit. At the moment that is helping mitigate this problem by restricting end-user bandwidth.

Replacing that with fibre would just open the floodgates wide open. It would make the current situation much, much worse unless there was a corresponding upgrade in the core.

You cannot solve the problem of too much being downloaded by allowing people to download even more.
Posted by cyberdoyle over 8 years ago
yep, lets restrict end user bandwidth. Lets go back in time. Lets give up the challenge of competing with other countries and go back to the tv. who needs the internet anyway. We have sacked off our industry, bankrupted most farmers, but hey, we have lots of civil servants and stuff so we will be fine.
Posted by cyberdoyle over 8 years ago
Wonder if Lord Carter managed to sort all this out before he left government or whether we have to go through it all again with another minister?
Posted by GMAN99 over 8 years ago
But cyber someone has to pay that's all there is to it, nothing else is holding this back, there's no lack of kit to buy and upgrade, no network changes that cannot be done, its all (as is usually the case) down to money. No one in their right mind is going to provide something for nothing, which is something you want by the sounds of it?
Posted by AndrueC over 8 years ago
@cyber:You missed the point of my post completely. I wasn't advocating leaving the last mile as copper in order to avoid the problem. I was pointing that upgrading it would not help the current situation.

You don't seem to understand how complicated this is. There are technical, political, geographical and financial issues that need to be addressed. Constantly bleating 'remove copper' as an answer to everything just shows a lack of understanding at pretty much every level.
Posted by ccsnet over 8 years ago
...Heres some thing to put this lot in context. BT Vision is having a tough time at the moment... Their Director resigned this week due to frustration, Sky are rolling out VOD & Xbox VOD this year ( been held up by BTV ), Sentarna was a big part of the subs, DTT channels are going to shink ( ITV3 / ITV4 etc ), Prices are on the up and now comparative to Sky with content changing very little despite the big names - add to this the total lack of advertising and it does not look good.
Posted by ccsnet over 8 years ago
Also remember - BBC, ITV, CH4 & CH5 also have VOD sections on BTV for which they will no doubt get £ for so Iplayer eats in to that profit there too.... ( BTV does not have Iplayer - all very complicated )...
Posted by ccsnet over 8 years ago
Re copper - I'm suppressed TB have not picked up on the fact that all these billions have been pumped in to the banks and yet a fraction would help the UK network be fully upgraded to fibre ( £15b last I saw ).... that would help the masses and improve our world wise standing and bring in business imho.... heck London’s getting a new railway just for that money !

Posted by ccsnet over 8 years ago
PS: I think BTV is great technology but its been delivered badley.... another reason Canvus was been looked at by BT as they have the kit and the infrastructure today.
Posted by AndrueC over 8 years ago
@ccsnet:Most of us have noticed that. OTOH a fair few of us (probably the majority) feel that rescuing the world's banking system did more for the country than rolling out a high-speed broadband network would have done.

We haven't discussed the value of the bank bailout quite as much as we've discussed the value of highspeed broadband but both *have* been discussed and you're not the first here to make that suggestion.

FWIW I think the bank bailout had a lot more value. It was distateful but neccessary. Highspeed broadband - meh. If it were that important I think we'd be doing it already.
Posted by andrew (Favicon staff member) over 8 years ago
Fully aware of the sums the banks have had, I think in briefings to mainstream press we've covered this area well. A lot of time is spent on trying to get facts out to a myriad of locations these days.
Posted by ccsnet over 8 years ago
MMMmmm does some one know some thing ? Offcom have said some thing of the same vain today.... T
Posted by ccsnet over 8 years ago
@AndrueC - Yes I agree it had to be done but whats an extra £15b on top of whats spent now to have a world class network ? T
Posted by AndrueC over 8 years ago
@ccsnet:If they maximised the use of UK labour and products I'd back that. Unfortunately I don't see either being likely. Labour might not be too bad but the really useful bits of the project, where the long term gains can be made would go to foreign companies.

Removing a few thousand low skilled people from the unemployment register doesn't really do much for the country as a whole. Not for very long, anyway.
Posted by andrew (Favicon staff member) over 8 years ago
The need for us the consumer to pay more as we consume more has been covered a lot by us, with warnings that prices might have to start rising.

£1 to £3 a month is a lot if you pay just £5 a month now, the extra should not just be for Canvas content, it should reflect our growing consumption of bandwidth from all services.
Posted by chrysalis over 8 years ago
andrueC I think the core needs upgrading first is not relevant, first the core is more than capable anyway, second 21cn actually takes load off BT's core since isps like entanet will now use their own core. The problem is more to do with ipstream wholesale BT pricing, any capacity/shaping issues are largely around ipstream isp's. The only LLU isp with a real problem is tiscali. Talktalk to a lesser extenct but not so bad as mainstream ipstream isp's.
Posted by Dawn_Falcon over 8 years ago
And of course network neutrality's not important, no. The moment there's differential charging for one thing, how long do you think it'll be before there's differential charging for everything? Not long.
Posted by chrysalis over 8 years ago
net neutrality is what the net is about, but its also what the broadcasters and entertainment industry hate about the internet. I guess BT not been a broadcaster they are just interested in making more profit regardless of how immoral it is.
Posted by krazykizza over 8 years ago
Okay. 3000GB from LINX is £70. Wholesale, £60. They're costs are therefore pennies per user, but charge top market prices. BT of all should think beofre they announce to PR.
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