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iPlayer chief pushes tiered charging for ISPs

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Analysis The executive in charge of the BBC iPlayer has suggested that internet users could be charged £10 per month extra on their broadband bill for higher quality streaming.

The comments by the BBC's head of digital media technology Anthony Rose reopen a contentious debate about how to pay for the bandwidth consumed by iPlayer, which ISPs have complained strains their already marginal profit structures. Tiscali suggested that the BBC should pay ISPs to carry the traffic, while the Corporation played down the impact of the player's success.

Now Rose has suggested that further improvements to the current 800Kbit/s top quality iPlayer streams may require ISP customers to pay more as part of a tiered service model. Within three months the BBC might offer streams at 1.5Mbit/s, he said, and suggested ISPs should charge customers more to receive them.

In an interview with a technical magazine produced by the European Broadcasting Union (EBU), a trade body, spotted by ISPreview, he said: "The future lies in tiered services. What we need to do is to create the iPlayer services at different quality levels and then let ISPs offer different bandwidth propositions to users. For example, the user who enjoys higher bandwidth connections would pay more, and those who are satisfied with lower bandwidth connections would pay less. Of course, nobody should get a worse experience than today.

"For example, the user can get a good quality iPlayer service for, say, £10 a month but for £20, a much better iPlayer quality would be available."

He suggested that every content provider should offer their service at various qualities, and that "ISPs will be able to work out how to sell that". Currently about seven per cent of peak UK internet usage is iPlayer traffic, Rose added.

Tiered services are already available from virtually all ISPs in the form of different headline speed packages, so what Rose is effectively proposing is a "BBC fee", or "streaming fee" if other content providers were to adopt similar quality banding. "This can lead to win-win situations and ISPs will see video services as a profit centre rather than a cost burden," he said.

It would mean paying again to receive television, however, which is unlikely to be seen as a win by licence fee payers. At a time when the future of the licence fee is being increasingly questioned, to suggest to web-savvy viewers that their broadband subscription is part of the cost of receiving BBC output seems self-defeating.

Conflating the £139.50 annual licence with £120 per year to receive programming via broadband would not be a win for those seeking to preserve the BBC either - no matter how many other commercial streaming services were included in the latter cost.

On its face, the suggestion of extra charges may appeal to ISPs - particularly, as Rose suggested, those who buy bandwith from BT Wholesale rather than invest in their own equipment in exchanges - but it would require a massive adjustment in how they operate.

For example, Tiscali operates at the bottom end of the current market, and its bargain-conscious customers are unlikely to want a higher quality iPlayer enough to pay extra - if they cared that much about the quality of their internet access, they would already be with a more expensive ISP. So a market where others charge more for access to higher quality iPlayer streams would have little impact on the BBC's net effect on Tiscali's bandwidth costs; if anything, it would put it at a competitive disadvantage.

More generally, ISPs who advertise 2Mbit/s downstream access (and much more) would be faced with telling their customers, "Your internet access is 8Mbit/s, except for the special 1.5Mbit/s BBC (or YouTube, or Project Kangaroo, or whatever) data, because it costs us more". After years of selling consumers pipes, not what they carry, that would be tough to pull off.

Fortunately tiered services aren't the BBC's only idea for softening the impact of iPlayer. It has edge caching arrangements with Virgin Media (the same idea that Google is using in the US and that caused a row among net neutrality watchers recently), and is investigating installing caching systems in the BT network.

Read the full EBU article here (pdf). ®

Update

Tip of the hat to Connected TV, who were first to cover this story.

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