Online TV content providers reject bandwidth bottleneck claims

Joseph O'Halloran ©RapidTVNews | 05-10-2011

As the row over net neutrality rumbles on research commissioned by a number of leading content providers, including broadcasters, has found that content such as theirs does not cause network bottlenecks as some ISPs complain.

With the current upsurge in use of over the top (OTT) online video services showing no signs of abating—particularly as the ITV Player, 4oD and Channel 5 make strides to join the iPlayer in the UK, just as Hulu and Netflix drive the US—network providers are pressing for a renegotiation of deals as they worry about he effect such services will have on their core offering.

However the new research published today by Plum Consulting—commissioned by the BBC, Blinkbox, Channel 4, Skype and Yahoo! and timed just before Ofcom publishes a guide on the subject—refutes the suggestion that telecom providers costs are ballooning because of data growth and argues that content and application providers do not cause traffic issues.

In addition it suggests that online content and application providers drive actually demand for broadband connectivity which in turn has driven fixed and mobile broadband revenues of approximately €155 billion in Europe in 2010. Indeed the report states that without content providers' considerable investment in innovative consumer services to fuel growth in uptake of high-speed broadband, telecoms companies would have experienced a rapid decline in revenues.

Addressing the net neutrality issue whereby content owners could likely be charged extra for using disproportionate amounts of network providers' resources, the survey clearly rejects any suggestion that content and application providers gain a free ride on networks. On the contrary, the report shows how content and application providers “invest considerably” in distribution infrastructure and technologies.

Firing a warning shot across the bows of network providers, the report warns that investment in next generation broadband would not necessarily increase, and may decrease, if content and application providers were required to pay for access to consumers.

The study concludes that an Open Internet is the most efficient model in delivering continued benefits for consumers and the economy, including telecoms operators, and recommends that additional safeguards are put in place to maintain a high quality "best efforts" Open Internet that sustains innovation and drives growth.

Specifically, the report recommends that EU institutions, national governments and regulators should signal a clear commitment to safeguarding an open Internet providing open access to and distribution of internet-based, lawful content and applications for consumers. That is no blocking of legal services or discrimination on the basis of commercial rivalry as threatened by some.

The report also calls for protection against “unilateral and opportunistic” requests for payment which it goes as fare as to describe as “holding market players to ransom”.

Said Brian Williamson, Director at Plum Consulting: “The open internet has supported a virtuous circle of innovation in applications and content provision and in broadband access provision. The open internet benefits consumers and the whole economy. A commitment to the open internet is now required, given the costs and risks involved in a possible departure from the open internet norm, in order to sustain innovation and investment along the value chain, to the benefit of all."