Rich Fiscus
13 Aug 2007 7:22
Analysts believe that ISPs have started to revolt about delivering net video because of the fickle European broadband market and because publishers are effectively transferring their distribution costs on to the ISP.
Ian Fogg, an analyst at JupiterResearch, wrote on his blog: "If ISPs had healthy margins for broadband, this wouldn't matter anything like as much. But European consumers are highly price sensitive on broadband access, so ISP margins are poor."
In addition, he said, most large ISPs have launched their own TV services.
"These internet delivered TV offers both push up ISPs' bandwidth and network costs, and they potentially undermine the ISPs' own TV services. So ISPs vocally use the issue of higher costs, while ISPs are also concerned about revenue protection for their TV services."
While services like BBC's iPlayer are popular with consumers, ISPs aren't happy about providing the bandwidth required for their customers to take advantage of them.
Arguably, the real question is whether ISPs should be selling services based on peak throughput being offered, or a more realistic number of sustained data transfer. As long as the former number is used instead of the latter you can expect consumers in many places to complain that they're not getting the service they're paying for, and ISPs complaining that they can't provide the bandwidth required for streaming video.
Source: BBC News