ISPAs 2008: Music can save broadband

These are relatively dark days for the ISP business. With the market saturated, fewer and fewer new broadband customers are scrapped over by fewer and fewer players.

All the while, bandwidth costs are on the increase, fired by the success of the BBC's streaming iPlayer, and the price consumers are willing to pay for internet access continues to fall.

Against that economic background it's easier to understand why BT, Virgin Media and Carphone Warehouse have so eagerly pimped their customers out to advertisers via Phorm in pursuit of new revenue streams.

Not that a casual observer at the ISP Association awards on Friday would have detected any angst. The industry's annual get-together was standard, good fun, boozy fayre.

The chat at the tables and in the coat queue told a different story, however. Morose execs grumbled variously about bandwidth costs, Ofcom, BT Wholesale, three strikes and ad targeting.

In fact, several we spoke to brought up the Phorm controversy unprompted; be assured that those who haven't signed up are gauging public reaction to ISP-level ad targeting as we write. El Reg noted that NebuAd, Phorm's biggest rival in the data pimping game, sponsored one of the awards.

Amid the gloom, the highlight of the evening was an impassioned plea from ex-Undertones singer Feargal Sharkey, who's now chief executive of British Music Rights. He offered an olive branch to the embattled British ISP industry in his speech: let's make lots of money.

"For me, the business model of the future is one where music is bundled into an ISP or other subscription service and the revenues are shared between the distributor and the content owners," he told the audience.

"This is the debate we need to get back on track: how to unlock [the] insatiable demand for music, and in a way that grows both of our businesses. Surely the bright and brilliant minds in this room can help figure this out?"

The firebrand speech was given a warm welcome from the crowd, who had come from all levels of the ISP game, from the boardroom to the data centre. Shortly after the applause, one high-ranking ISP exec told us that the vociferous anti-Phorm movement could serve as a signal to broadband providers that the way to grow the business is to add service. He wondered, on condition of anonymity, whether broadband had reached the point where it has squeezed every last penny from the existing market.

Later, during the back-slapping, the gong for Consumer ISP of the Year went to PlusNet, which has mounted a strong comeback after a series of terrible technical blunders prior to BT chucking some cash at the firm last year. It has emerged as one of the industry's strongest and most honest voices, recently providing surgical detail on the iPlayer's impact on bandwidth charges. Business ISP of the year went to Eclipse, the national ADSL outfit run by Hull's K-Com.

As usual, by the time the ceremony got round to Internet Villain of the Year - a perennial crowd-pleaser - the rabble were winningly drunk and shouty.

Sharkey had wryly lamented in his speech that three of the nominations were related to music. Happily for any ISP plotting a partnership with the record industry - yet weirdly - HMRC bagged the ornament thanks to the child benefit data loss calamity.

We say "weirdly" because as far as we recall HMRC lost some CDs, and the internet had nothing to do with it. But at least ISPA didn't offend its new cool friend in the music business. ®