Virgin Media could charge content providers to carry material
Tuesday 15 April 2008 05:28:41 by Andrew Ferguson
The recent blog entry from Ashley Highfield who used to head up the BBC iPlayer project appears to have opened up a bit of a hornets nest. Virgin Media CEO Neil Berkett has stepped into the ring suggesting that the company may charge content providers for the option of giving their traffic priority over others.
Digital Spy has more on what Neil Berkett covered in the interview for Television the Royal Television Society's magazine. It is not clear whether the talks about paid for content will simply mean better priorities over the network, or providing Virgin Media customers with higher quality video content for example.
The traffic management to date on Virgin Media cable products has been traffic type neutral, but this option of charging for a higher priority suggests that things may be changing. Given the premium price of the 20Mbps cable product and the expected price of the 50Mbps service when it arrives it remains to be seen what the reaction of the 20% of Virgin Media broadband customers who opt for the premium services will be.
Charging the content providers will be a double edged sword, as there may be a provider with very popular content who refuses to budge on paying for a priority level and customers may simply switch to other broadband services for the content. Virgin Media may be able to rely on a reasonable amount of inertia as changing from cable broadband to a DSL based service can mean sorting out a telephone line rental, and if dumping the digital cable TV finding another digital TV service as well.
Update 5pm Tuesday 15th April: A spokesman for Virgin Media has communicated with The Register suggesting that Mr Berkett's comments have been taken out of context.
"We strongly support the principle that the internet should remain a space that is open to all and we have not called for content providers to pay for distribution,[...]However, we recognise that as more customers turn to the web for content different providers will have different needs and priorities and, in the long term, it's legitimate to question how this demand will be managed. We welcome an informed debate on this issue"
Part of statement from Virgin Media spokesperson
If the latest comments are correct, it appears the comments related more to peering relationships with providers such as the BBC rather than any traffic priority scheme that could be employed within the Virgin Media network with content providers being able to buy higher priorities for their traffic.
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It won't be charging the customer but more the people who provide the content like the BBC for the BBC iPlayer. The cost of £37 for 20mb won't change for the strategy mentioned in the article.
Why should VM expect content providers to pay up? Without the likes of the BBC and youtube there would be far less demand for their *cough* superfast broadband speeds.
I hope this is in relation to peering rather than traffic prioritisation, if its the latter its a very bad move by VM.
You would think at £37 per month they would be able to provide an unrestricted service to end users, with a fair use policy of course. They may well have plenty of capacity to spare in their core network, however if they under invest in UBR’s which have limited capacity, then they may as well have enough bandwidth for the entire world, because if customers can’t take advantage of it what is the point?
The obvious reason why they don’t release more UBR’s is because they cost both time and money to implement, which could be better spent on shareholders.
Nuts. They've shown their hand. You want to have a deacent connection to VM subscribers? Well, buy in and you can get through those nasty congested UBR's.
Virgin Media broadband customers who opt for the premium services will be .......
The question is: will they paying more for the premium services on 20Meg and 50Meg ? As 20Meg is already expensive at £37 per month and 50Meg trial at £47 per month. Look like VM will added extra better priorities over the network will be an extra of £10 - £15 per month on top of £37 and £47 per month. No thanks as VM should bring bandwidth cap usages per month instead of increasing prices. A cap of 50GB per month more likely enough for the customers.