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Monday, August 13, 2007

iPlayer going to be Throttled

The current debate that has started between the ISP Industry and the BBC over the iPlayer highlights a fundamental flaw in the Public Value Assessment (PVA) by the BBC Trust for the on-demand services – it basically ignored the costs of internet video delivery and in fact rather naively stated:
How the networks adjust and how the costs are met is ultimately a matter for the market. Undoubtedly, the BBC Executive may be involved in discussions with ISPs and network providers but we do not consider it appropriate to issue any directions to management on this issue in this approval.
Effectively, the BBC regulator buried its hand in the sand hoping that the “market” and the BBC Executive would come to some sort of amicable solution not realising that a sinister market solution might be deployed. eg mass blocking of the service.

The other major flaw with the PVA was that it built demand forecasts based upon two incorrect assumptions:
i) that the service would be “incrementally” free; and
ii) the service would be available for peak-hour viewing.
A user consuming loads of bandwidth by watching loads of video may have to pay for a more expensive broadband service in order for it to work. In this mornings FT, this is a potential solution proposed by Mary Turner, CEO of Tiscali. Another “nuclear” option was suggested in the Daily Mail where tagging of the BBC traffic and throttling it was suggested.

I’m sure the BBC demand forecasts would have turned out completely different if the question was “If you had to pay your ISP £2/month extra to use the iPlayer would you use the service?” or even “If it took you 48-hours to download the latest Eastenders programme would you still want to watch it on your PC?” or even worse "If it took 48-hours to download a legit copy, would you prefer for a non-DRMed bootleg copy that you could burn to DVD and watch on your TV?"

This is a crucial battleground for the ISP industry and one in which I believe the BBC does not have the moral highground. After all, it pays huge fees to Arqiva/National Grid Wireless to transmit its Terrestrial digital TV signals and it also pays huge fees to Astra to rent satellite capacity for transmission of its content by Satellite – why did it expect to transmit its content for free over the internet?

The ISPs are fighting a Public Sector Broadcaster and the results of the fight will be able to be applied to other commercial video content providers, such as ITV, Channel4, Sky, Google and the rest of the emergent video crowd. It is a vitally important fight that the ISP industry needs to win or at worse get a compromise draw that can be imposed on the rest of the commercial sector.

The BBC Trust has already got its knickers in a twist with the lobbying by the Open Source Community for a non-Microsoft solution, I suspect this time around a more potent force is about to be deployed to strangle the iPlayer at birth. After all, most large ISPs (BT, Tiscali, Orange & Sky) already have video business plans of their own - why should they roll-over, let the BBC solution dominate and ruin their business plans?