How the BBC plans to save your ISP
Auntie's next big iPlayer gamble
The BBC iPlayer is now an undeniable success with consumers. The technological mistakes  and management waste of its lengthy gestation are almost forgotten in the flush of popular excitement surrounding the fact that now - at last - quality television is available on demand on the web.
A hostage to this success, the Corporation now faces its next big internet gamble. The price for a bad bet this time could be much higher, threatening the unique way the BBC is funded.
The restructured team behind iPlayer's resurgence is understandably upbeat about the spluttering revolution it's kickstarted. "In ten years it would be surprising if television wasn't all over IP," iPlayer boss Anthony Rose told The Register last month.
But to the ISP execs we've been speaking to recently, such predictions don't sound like a utopian vision of television that'll stand or fall on its quality, free from the schedulers' whims. Rather, it's a doomsday scenario for the broadband business in its current form. Backward as it may sound to TV execs, the way the bandwidth market is structured means people using the internet more is a bad thing for ISPs.
The BBC hierarchy knows that it must address this problem to preserve public service media in the IP world. The iPlayer project is already facing accusations from open source advocates that it has illegally interfered with the operating system market. More criticisms from business are sure to follow as BBC Worldwide ramps up efforts to compete in commercial media markets.
The Weakest Link
Web users got the first independent indication of how big a problem the iPlayer could be for their ISP a few weeks ago. Figures released  by PlusNet showed that in the month following its Christmas marketing launch, the Flash-based version of BBC TV catch-up sent streaming costs rocketing 200 per cent.
Since streaming represents about five per cent of all the traffic PlusNet has to pay for, that's an overall costs increase of ten per cent in one month.
Such a big, instant costs hit would be tough for any market to take. For ISPs, who are already operating a fiercely competitive volume business on tiny margins, it's a thundering right hook.
And ISP execs know that iPlayer's impact will only increase as the BBC ramps up its rollout of the service away from the desktop and onto mobile devices and set-top boxes - including games consoles - over coming months. In this context, the headily slick experience of iPlayer on iPhone  is a gateway drug.
Right from the point when ISPs first publicly voiced  their fears over BBC on demand in August last year, the BBC has been ready to coo soothing words. Ashley Highfield, the BBC's director of future media technology told us in February that his new friends in the broadband business say iPlayer's impact on ISPs has been "negligible" so far.
The technological strategy the BBC is considering to soften the blow says different.
The National Lottery
The Corporation is considering a radical solution: throw money at the problem. It is investigating building its own Content Delivery Network (CDN).
The principle is very simple: by installing servers in ISPs' networks, iPlayer streams only have to be carried to that point once, instead of hundreds of thousands of times. That obviously slashes backhaul bandwidth costs, and the closer to the edge of the network the caching better for the ISP.
iPlayer honcho Rose implied that the more the BBC could invest, the better. "The closer you can get the content to the edge of the network the better for everyone," he said. "Closer to the edge" means installing hardware in the hundreds of local exchanges across the UK.
By storing programmes on these boxes locally, as well as reducing the BBC's impact on ISPs' bottom line, Rose hopes it will be possible to improve the reliability and quality of stream for viewers. Comparing iPlayer to user-generated content from YouTube, he said: "It's not like it's a video of a cat where you say 'if it works then great, if it doesn't, no big deal'."
"Content delivery networks are one of many solutions we're considering to give consumers a better experience."
Velocix, one CDN company the BBC is working with, would love to see a massive infrastructure investment from the national broadcaster. Its motivation of course lies at the other end of the economic equation: profits rather than reduced costs.
This type of CDN, inside ISPs, is different from the service provided by firms like Akamai, who distribute popular websites worldwide over a proprietory infrastructure. "At the moment all they do is dump all the traffic over the wall and leave it for the ISP to deliver," said Velocix CEO Phill Robinson.
It seems the secret for the BBC to successfully invest in this technology will be timing. It can scarcely afford another blunder on the scale of the £5m it estimates it has spent on the iPlayer's scarcely-used  peer-to-peer download application. The cost of building and maintaining out a nationally distributed network of servers would dwarf that sum.
The overriding fear must be that the telecoms industry, regulators and government might pull their collective finger out and deploy fibre to the home. Unlikely as that sounds right now, investment in a real next-generation UK internet infrastructure could swiftly render a CDN next to useless. Against that background it's unsurprising that the Beeb is still judging the form for a CDN deployment. "We're engaging with ISPs and they have been very positive," was Rose's coy assessment of the going recently.
At the relaunch of Tiscali's own IPTV service earlier this month, the firm's consumer business MD Steve Horley and Neal McCleave, the media services MD, remained cynical. A BBC-owned CDN would only cut iPlayer broadband traffic costs satisfactorily if kit was rolled out right to the local exchange, they said.
Every Second Counts
Like the BBC's timing quandary on a potential CDN deployment, major consumer ISPs like Tiscali have a dilemma when it comes to iPlayer. They're happy to carry iPlayer traffic all the way from White City to set-top boxes for their upscale TV package customers if needs be, but aren't so keen when it comes to the vanilla broadband cheapskates. But happily for them, that tension is felt most keenly by the BBC.
The reason is obvious, if uncomfortable for the BBC. An emerging stratified broadband customer profile is obviously at odds with its public service obligation to deliver TV to every licence fee payer. In turn, that means the gamble over investing in an iPlayer delivery infrastructure, such as a CDN, is even more pressured.
Add to that the fact that the iPlayer is now a success, and it's clear the stakes for the Beeb's big net bet are higher than ever before. And the clock's ticking. ®