The British Broadcasting Corporation's iPlayer is extremely popular and the most network capacity-hungry Internet service in the UK. The government will allow ISPs to charge premium prices for guaranteed performance with iPlayer and its equivalents. The corporation's intention to grade quality of service will promote this development.
Video takes its toll on networks with its persistent demands in streaming and by consuming gigabytes of capacity per user per month. Whereas the iPlayer has only moderate speed requirements of a megabit or so per second for its standard- and high-definition services, the streamed sessions require that capacity persistently--even during network busy hours. Downloads are also demanding with around 500 Mbytes of network capacity required per viewing hour. With around 100 million iPlayer TV programs requested per month and 25 million UK households, that's an average of 4 per month for every household in the UK. This also equates to a few gigabytes per household: quite a lot for just one producer. ISP's and wholesale network providers can struggle to maintain adequate service quality and satisfy such demands. Some favour throttling these most capacity-intensive services for some of the time to let more capacity-frugal services work properly or at all.
At the FT World Telecoms conference last month Erik Huggers, the BBC's Director of Future Media and Technology, said the corporation would like to rate network performance delivered by ISPs for its Internet services including iPlayer. He proposed a kind of green, amber and red traffic light scheme with a green light for satisfactory and a red light for degraded performance. ISPs with sluggish and variable service quality or throttling could thus be outed. It was not clear to me if or how its system would distinguish between degradation due to network congestion versus managed throttling by ISPs. The system would allow "consumers to see that their ISP is behaving appropriately," he told the conference. Huggers said BBC already pays its way with certain communications expenses and it would be unlikely pay ISPs to ensure higher service quality. I'm sure consumers would like the option of better performance and reliability. How might the ISPs react?
UK government shuns net neutrality
Common sense has prevailed in the UK with confirmation of commercial and technical freedom for internet service providers. This is the most fertile environment for supplier competition and consumer choice. It will enable BT and Virgin Media with their own access networks and a plethora of other ISPs--including Talk Talk, Sky, Orange, AOL and Plusnet who buy wholesale supply---to compete by offering premium access at higher prices, if they wish. Also speaking at the FT event, Britain's Minister for Culture and Communications told us that the government had decided to let market forces rather than regulation prevail. It has concluded the UK's broadband market is sufficiently competitive to allow ISPs flexibility in business models rather than to regulate the way they do business and price for it. This means it will be left to ISPs themselves to determine whether speeds are throttled or if more is charged for preferential content delivery. ISPs may favour traffic from one content provider over another as long as they disclose their discrimination policies to customers. In contrast, net neutrality conditions would have hobbled market development.
Managing and monetizing demand growth
Growth in video-on-demand over the public Internet is a terrific development that should be embraced because of the net's extensive reach. With TVs as well as PCs increasingly enabled for internet access, the demand for the iPlayer and its equivalents with ITV and other broadcasters is set to rise enormously. This will further strain the hard-pressed networks. With net neutrality uncertainties seemingly quashed in the UK, ISPs have the financial incentive to make investments that can provide the kind of access services required for consistent high-quality. Consumers will willingly pay extra for these. If Internet-based video performance was adequate, reliable and with sufficient choice in content many would give up cable and satellite. Five pounds ($8.00) per month would be a reasonable and affordable premium for a video service-level guarantee. It's the price of a DVD rental or two and it is not much in comparison to average monthly subscription TV charges. But how should the service level be defined, monitored and results reported? It's not just about peak or average speeds and it's more subtle than total data volume per month. Despite buffering, video streaming data rates must be maintained despite second-by-second network loading and fluctuations. How can one reliably tell any particular service will be up to par?
It seems the BBC is volunteering for that very useful monitoring job with its proposed "traffic light" indicator. This will encourage ISPs to offer service levels required for iPlayer and can help consumers select from among them on the basis of performance and price.
OTT pricing
Quality of service measurement, reporting and service-level pricing along with selective traffic management will become important trends on fixed and wireless networks as customers become more and more demanding of their network services. QoS standards for network performance will be defined and measured by the over-the-top content providers, including the BBC, as well as the network service providers and ISPs. Gone are the days--in the UK at any rate-when heavy or squanderous consumption of network resources by OTT providers is disregarded with demands for net neutrality on basic services. Nevertheless, popular OTT providers could even grasp increasing sway over ISPs and network operators with whom they ally for mutual commercial benefit. For example, one might depict Skype as the ultimate OTT service because it rides for free and undercuts its hosts' cash cows in switched telephony. However, 3UK and Verizon Wireless in the US already integrate and promote Skype-friendly capabilities as value-added features for their customers. As ever, when given the choice, consumers will vote with their feet for the best value-for-money provided, even at higher access prices when it provides them with what they want.
Keith Mallinson is a leading industry expert, analyst and consultant. Solving business problems in wireless and mobile communications, he founded consulting firm WiseHarbor in 2007. WiseHarbor has recently published its Extended Mobile Broadband Device Forecast to 2020. Further details are available at: http://www.wiseharbor.com/forecast.html