Who will pay as the Internet grow

BERLIN: Last Christmas, the BBC started an online service called iPlayer that streams live television programs and a backlog of shows from the previous week to online audiences. Through April, Britons had watched 75 million episodes of programs like "Doctor Who" and "The Apprentice." While a boon for the broadcaster, the service has burdened some British broadband operators, who say their networks have had to carry sharp increases in BBC video traffic. A few have even called on the BBC to share the cost of transmitting the video. "What we are asking for is not unreasonable," said Jody Haskayne, a spokeswoman for Tiscali UK, a broadband operator with 1.9 million customers. Noting that the BBC pays to have its programs delivered over the air and on cable, she said, "there is a precedent for payment." The BBC has balked at paying broadband operators. But the debate over the iPlayer reflects a broader change in the relationship between Internet operators and content providers, a bond that has nurtured the growth of the Internet over the past 20 years. Facing a surge in traffic, many European Internet providers are building faster networks. But rising traffic from video-driven Web services like iPlayer and YouTube, as well as Internet gaming sites and social networks, threatens to outpace the capacity of even these faster networks, industry experts said. "There is an economic tension building," said Pat Dolan, general manager in Europe at Tellabs, a U.S. maker of networking equipment. "If you look at the demands on network operators, the question becomes: How can they continue to make money when out of nowhere comes this huge volume of video that wasn't there before?" Amid the growth, some network operators have begun restricting high-volume broadband users during peak times, an issue that has become sensitive because some advocates of an unfettered Internet say any effort to limit traffic is tantamount to censorship. The critics of limits, who include free speech advocates, peer-to-peer file sharers and major content providers whose services depend on the Internet for distribution, argue in favor of "network neutrality" - the idea that every bit of data should be given equal priority, whether it is part of a simple e-mail message or a cumbersome video file. Equal access for all, supporters say, is good for innovation, allowing start-up companies to flourish on the Internet. But network operators argue that as users of large amounts of bandwidth earn ever more revenue on the Web, they no longer should be given a free ride. Otherwise, they say, telecommunications companies will be unable to build the new, faster networks needed to facilitate the start-ups of the future. The principle could get its first legal test this month in the United States should the Federal Communications Commission rule on whether to rebuke Comcast, a broadband and cable operator, for limiting some peer-to-peer file sharing during peak hours. Comcast has argued that it has the right to manage its growing network demands. The debate in Europe has centered less on free speech issues and more on whether telecommunications operators should have the right to access the new broadband networks of their competitors, a right they do not now have. Under legislation drafted by Erika Mann, a Social Democratic member of the European Parliament from Hannover, Germany, operators would be given so-called interconnection rights in exchange for either shouldering a portion of the cost of investing in a new network or by paying a user fee based on their traffic. The Parliament's Committee on Industry, Research and Energy is scheduled to consider the bill in July. "We are trying to strike a balance," Mann said. "We want to make sure that the Internet remains interconnected and operators have an incentive to invest and build these new networks." European regulators so far have not intervened. In Britain, the media regulator Ofcom has studied the effect of the iPlayer on broadband operators but has announced no plans for regulation. In Brussels, the European commissioner responsible for Internet issues, Viviane Reding, said in April that traffic prioritization by broadband operators was legitimate, but she wanted to give European Union regulators the option of setting minimum quality thresholds for consumers, to ensure that their service was not slowed down too much. Consumers occasionally notice the limits placed on high-volume broadband users, when streaming videos slow into a series of halting still photos. At Tiscali, Haskayne said, low-volume users can still scroll the Internet or check e-mail during peak hours because high-volume users are temporarily given lower priority. The practice, said Dan Cole, the director of product marketing at Thus, a company that operates the Demon broadband network in Glasgow, is called traffic shaping. "Everybody manages their traffic to a certain degree," Cole said. "Every ISP is going to have traffic shaping. How much do you do that? How much do you tell your customers? How noticeable is it? Those are the big questions. Some things will slow down occasionally. But the end user still gets a decent experience." Operators generally do not like to discuss their traffic management practices, fearing that they will scare away customers, said Robinson of Velocix, adding "I think it is the big elephant in the room." Marvin Ammori, the chief legal counsel at Free Press, one of the two nonprofit groups that have filed complaints with the U.S. communications agency about Comcast's network management practices, said the regulator needed to draw a line on what level of traffic management was acceptable. Suranga Chandratillake, the chief executive of Blinkx, a video Internet search engine in San Francisco, said he did not think that the agency would intervene. "Their deliberations have been open-ended," Chandratillake said. "So far, the FCC commissioners have shown a healthy respect for letting market forces sort this out." Bills now before committees of the U.S. House of Representatives and the Senate would direct the agency to study broadband operators' traffic management practices and determine whether new rules are needed to guarantee the openness of the Internet. Proposed legislation in the Senate seeks to forbid operators to manage traffic by arbitrarily selecting individual applications, users or content services. To try to accommodate more video and other bandwidth-heavy content, telecommunications companies are spending billions of dollars to upgrade their networks. Deutsche Telekom and France Télécom, as well as some of their local competitors, already offer speeds of up to 16 megabits a second, eight times the speed of many residential services. BT, formerly British Telecom, began selling other broadband providers access to a new network in April that operates at speeds of up to 24 megabits a second. Cable operators like Virgin Media in Britain are also speeding up their networks. But Internet traffic is projected to jump, said Phill Robinson, chief executive of Velocix, an operator of a so-called content delivery network, a dedicated Internet fast lane of sorts that helps content providers like the BBC distribute their video over the Internet. And so too would the downloading of rich content. "Watching one DVD over a broadband connection is like downloading 1,000 MP3 music files or viewing 100,000 Web pages," said Robinson, who is based in Cambridge, England. The most likely outcome of the capacity crunch, said Suraj Shetty, vice president of the worldwide service providers group at Cisco, is that consumers will have to pay more to ensure faster speeds and guaranteed access. Broadband providers now typically sell packages with speeds "up to" a certain rate, but the actual speed is often lower. "The debate about network neutrality is an ongoing debate," Shetty said. "There will be a way found over the next few years that decides whether the consumer or the content provider pays for these increases in traffic. But in the end, I think it will be more the consumer who ends up paying." By Kevin J. O'Brien International Herald Tribune