Wednesday, April 09, 2008


World's Smallest Violin

BBC has an article about iplayer, costs and the ISP business

In its first month of launching, the catch-up TV service saw 1m people download more than 3.5m programmes.

According to figures from regulator Ofcom it will cost ISPs in the region of £830m to pay for the extra capacity needed to allow for services like the iPlayer.

Lets do some math, and lets be generous with our assumptions:

Average length of a programme: 1 hour
Bandwidth for a 1 hour programme: 1 Gbyte
3.5 million programmes bandwidth: 3.5 million Gbytes
Wholesale bandwidth costs for ISP[1]: 5p/Gbyte

Total cost per month: 3.5 million * 0.05
Total cost per year: £2.1 million

2.1 million not 830million. Care to explain where all the extra is coming from?

I'm quite sure BBC iPlayer was expected to get 400 times traffic growth in its first year, we'd be hearing quite a lot more about it.

Given that ISPs are already charging consumers to supply them with data. Granted the 5/month "unlimited" tarrifs are just lying - you cannot provision at those costs.

But ukfsn offer consumers ADSL packages at sane costs (and make a profit, which supports open source stuff). They will give you 45Gb at peak times and 300Gb off peak for about £30/month. That covers their internal infrastructure, billing, ops, marketing AND the bandwidth.

The best I can come up with is that the ISPs want to say they will give you ADSL free, and then making the money by charging the BBC (or, us, the consumer) to send the data over the network.

[1] Amazon will sell ME (a regular retail consumer) bandwidth at about that price. I'm quite sure ISPs can get better. True UK bandwidth costs more, but this is all traffic between the BBC and the ISPs. At least a couple of years ago, the BBC had direct peering arrangements with all the main ISPs. This means that aside from the installation and on-going cost, the bandwidth is free. Bandwidth within the ISPs networks is also essentially free once setup.

If I can buy bandwidth at 5p/Gbyte, I find it hard to understand why an ISP - who's only main job is networking - can't provision it's own internal bandwidth at about those prices (or a lot better)


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