BT Heavily Throttling BBC, All Video

[David Farber <dave () farber net>]

Begin forwarded message:

From: Dave Burstein <daveb () dslprime com>
Date: June 12, 2009 9:12:31 AM EDT
To: dave () farber net
Subject: BT Heavily Throttling BBC, All Video

Folks
I think this is the big one, especially since OFCOM's Ed Richards has  
been encouraging them. My story below has been sent to them for  
factchecking and no corrections came back.

Tim Bradshaw at FT just broke a major story, the first "net  
neutrality" challenge that may seriously affect people watching online  
video. The Comcast and other disputes were about symbol and  
precedents, and the actual throttling was almost trivial. This is a  
major carrier whose video lead has just resigned under fire (below)  
because they aren't getting enough customers, and is actively cutting  
competitive video down to half the usual bit rate while Hulu and  
others are increasing quality. They lost $2B on Global Services and  
just cut another 15,000 employees, so they are scrambling for revenue  
wherever they can get it, My sources are clear that's because of  
business, not technical or costs issues with likely Internet video  
usage. I have on the record senior people from AT&T, Verizon, Comcast,  
MIT and BT itself (below)

BT seeks to end 'free ride' by video websites

By Tim Bradshaw, Digital Media Correspondent

Published: June 11 2009 03:00 | Last updated: June 11 2009 03:00

BT has called for an end to the "free ride" it says video websites  
such as the BBC iPlayer and YouTube enjoy on its network.

The telecoms group, which was accused last week of "throttling"  
iPlayer performance at peak times, spoke publicly for the first time  
yesterday about how it hoped to charge content owners for delivery of  
their programmes over its broadband network.

"We can't give the content providers a completely free ride and  
continue to give customers the [service] they want at the price they  
expect," said John Petter, managing director of BT Retail's consumer  
business.

... Last week, the BBC reported that BT broadband "cuts the speed  
users can watch video services like the BBC iPlayer and YouTube at  
peak times", and that the BBC was "concerned the throttling of  
download speeds was affecting the viewing experience for some users".

Under the "fair use" policy of BT's Option 1 broadband package, BT  
says it cuts video streaming from 8 megabits per second down to 896  
kilobits per second between 5pm and midnight, which BT said was  
sufficient to watch iPlayer.

---- Here's my report including some BT comments last fall that  
contradict the claims, and some news for context.

This is the first really big challenge on net neutrality. Comcast and  
others were about precedents but the actual harm was minor.  
BT_boothLondon: British Telecom's John Petter tells FT they throttle  
“8 megabits per second customers down to 896 kilobits per second  
between 5pm and midnight,” and adding that's fine for the BBC iPlayer.  
That is not so. It is far below standard TV quality and half the speed  
of the typical U.S. network's Internet feed. (ABC was streaming at 1.9  
megabits last I heard. AT&T's U-Verse standard definition TV was 2.1  
megabits last time they spoke publicly.) Britons are rapidly moving to  
HD, as are video providers over the net at even higher speeds.

His other claim, that video traffic growth is driving up BT's costs so  
much they must charge extra, is unsupported. Cisco has just done a  
major report that finds a slight decrease in the rate of Internet  
traffic growth, confirming my reporting. While hard to handle video  
demand is possible in theory, I sally_davis_btreported in September  
from the CEO of BT Wholesale

Davis' network is ready for video

BT does not need to charge extra for access for the iPlayer. Sally  
Davis, CEO BT Wholesale, confirms she was misquoted about restricting  
access. They've solved any congestion problems. ... The local loop  
isn't shared so unlike cable has no problem. The fiber backhaul behind  
the DSLAM can be upgraded at modest cost, less than 2% of the service  
price. Almost all traffic is inexpensively peered, so there's no  
transit cost.

Result: BT, AT&T and almost large carriers can easily meet any  
plausible demand.

I was also delighted to report from BT their rates – and actual costs  
– for bandwidth are dropping.


BT Cutting High Volume Backhaul Rates in Half

The new BT backhaul is "approximately 50 per cent cheaper," Anna  
Easton of Openreach writes me. Gig-E's for under $2,000 as costs go  
down. ... Something is profoundly wrong in the British market. Cross  
the Atlantic or the Channel, and DSL carriers just don't have the same  
problems, even though their bandwidth demands continuing growing at  
30-40% per year per subscriber. Everyone from Verizon to Free.fr to  
NTT are not having cost or congestion problems, with an effective  
bandwidth cost of 1-4% of the price they charge the subscriber.



The reality is that while increased video use is driving traffic  
growth, the cost of the routers, Internet peering/transit etc. is  
going down about as fast. The cost per customer of bandwidth has been  
about flat for several years, about $1/month/customer at a carrier  
like BT. That's 2-5 % of what BT and most others charge consumers for  
broadband.

Saul Hansell in the NY Times researched these costs extensively,  
including experts in Britain. In an important set of articles, he made  
clear this is about higher carrier profits and preventing competitive  
video, not serious pressure from higher traffic costs.
http://fastnetnews.com/dslprime/42-d/1758-bt-heavily-throttling-bbc-all-video
BT pay-TV boss walks
Rapid tv news - Jun 10, 2009
Dan Marks, the highly-regarded CEO of BT Vision, the pay television  
division of British Telecom, has quit, citing his “frustration” over  
BSkyB's dominance ...

BT posts huge 4Q loss, to cut 15000 more jobs
The Associated Press - May 14, 2009
LONDON (AP)  Telecommunications company BT Group PLC said Thursday it  
expects to cut another 15000 jobs in the next year after its Global  
Services division ...




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