ISPs grumble over Video On Demand

Internet service providers (ISPs) in the UK are complaining about the amount of bandwidth used by video on demand services. Tiscali's Chief Executive Mary Turner commented in the Independent on Sunday and today's Financial Times saying, "The Internet was not set up with a view to distributing video. We have been improving our capacity, but the bandwidth we have is not infinite."

The outcry coincides with the BBC's iPlayer beta and is without a doubt an attempt to prepare users and business for the possibility of tiered services. For quite some time ISPs have been pushing to increase broadband take-up with increased speeds, incentives like a free laptop, and ‘unlimited bandwidth'. I say ‘unlimited bandwidth' because the bandwidth is most certainly limited with the help of acceptable use policies and throttling of high bandwidth users' connection speed during what are considered to be ‘prime time' hours.

There are several lines of speculation as to why service providers are crunching down on bandwidth usage. One theory is that BT Wholesale (who sell bandwidth to a majority of ISPs) are charging too much for their services which has forced ISPs to be tight-fisted. Some wonder whether the ISPs have simply failed to invest enough in their infrastructure to support the growing number of broadband users. It's interesting to note that two of the ISPs (BT and Tiscali) currently complaining about the bandwidth requirements of video on demand actually both run their own TV on demand services!

So what's the real issue? Are service providers struggling to meet demand due to the wholesale cost of bandwidth? Have they failed to properly invest in their infrastructure? Do they simply want to get paid twice without doing any additional work (once by the customer and once by the content provider)? Leave a comment and let me know what you think.