Piers Daniell

With the announcement last week that BT will be offering Sky Sports through its BT Vision product, I am convinced, more than ever that BT will focus on becoming a media company rather than a telecom provider. By using the premise of providing fast internet access (BT has earmarked over £2.5 bn into the investment into fibre based products, FTTC and FTTH), it has been able to create a platform to compete directly against Sky and Virgin Media.

While the rollout of these products is currently low, the footprint will bring the fight directly to Virgin’s door. And while Virgin may offer internet access it gets nowhere near the support from government as it is perceived as being a media company and not as a technology enabler, like BT. So while BT gets good press on bringing faster internet to the masses, and not its actual intentions on competing against Sky & Virgin, the others are treated, rightly, as a media companies.

This action further ruins BT’s reputation within the telecom industry as customers needs are being put to the bottom of the pile, while saying publically they are at the top. The BT Vision product, for example, is given priority across the BT backbone to ensure the TV quality is comparable to the competition. This means that other traffic is left to fight it out over the remaining space reducing quality. A niche ISP who has worked with BT for many years even put a public notice out on their blog about the issues their customers are experiencing because of the reduction in capacity. And this situation can only get worse as BT’s plans to become a media player grow.

My message, therefore, is don’t believe the headlines. Unless you are going to become a direct BT Vision customer then I can only see you being disappointed with BT’s connectivity plans.

Virgin Media this week launched their 50 Mb/s home service. I have written here before on their offering and misuse of the term ‘fibre’ and will be interested to see exactly how this service fairs. Theoretically at this speed users should be able to download at 5 MB/s meaning a 700 MB video (such that you get on Sky or BBC Iplayer) should take no more than a few minutes.

However I don’t believe take up will be high for a number of reasons. Firstly it costs £50 per month which is too much for the vast majority of home users – kids who are going to want to use this kind of speed are going to have a hard job convincing their parents that £600 per year is well spent. Secondly even though we are a business only ISP are seeing more attempts by media owners to track down IP addresses from where they believe illegal downloads have taken place. It must be a complete nightmare on consumer networks so companies like Virgin are either going to have to put restrictions in place or media owners will make more effort to prosecute. Problem is that if you remove the ‘free’ aspect of videos and music then I believe a lot of the requirement for high downloads will reduce, not increase.

Until HD video is widely distributed through IP home users aren’t going to see much of a difference between 20 or 50 Mb/s. Be There for example have been selling ADSL2+ in the UK for the past few years and with their extended footprint on the back of Telefonica O2’s investment have I believe a kind of glass ceiling in how many users require their service. Their service and quality of network is better than Virgin, so if they are selling a vastly cheaper but not much slower connection then how is Virgin going to compete?

Another factor is the speed at which the websites operate at. We have had 20 + Mb/s in our office for a number of years now and I know that downloading video or music can take an age, even though I know there isn’t any problems with the network (as it is Fluidata’s!). So the line can support more than 2 MB/s but real world tests show only 300 KB/s is possible due to capacity issues with the website.

Something else that is in the small print is the measly 1.5 Mb/s upload (equates to 0.15 MB/s) which I think will be a bigger problem going forward. More people are now logging into their home from outside or getting their home to send data like video out to the internet using technology such as Slingbox. The speed Virgin is offering is ok for most current services buy why pay more for less than half the speed other carriers offer?

As I say, consumers watch this space.