MediaTel

BT has launched a service that will allow broadband providers to charge content owners for better quality distribution.

The telecoms company has already started selling the service, which will enable some video content to reach consumers in better condition than other material, according to the Financial Times.

A new content distribution network built by BT will ensure greater bandwidth for users wanting to watch online video without disruption, even during peak online usage times.  BT Retail is currently using the wholesale service called Content Connect to supply the company's television customers with the BBC iPlayer.

The rise of online video due to the popularity of sites such as YouTube, as well as the predicted increase of video on demand services, especially following the upcoming launch of YouView, is likely to see other leading ISPs following suit.

However, for smaller providers, the level of investment required for a new distribution network will not be possible and therefore the market is expected to see consolidation in the ISP arena, with potentially just five or six key players dominating within the next few years. Although BT claims that smaller providers using BT's network may be able to reduce their costs by cutting spending on 'backhaul' connections.

There is also the possibility that consumers will have to foot the bill as online video continues to grow, particularly once connected television becomes the norm, in a similar way to mobile phone customers pay for a certain level of 'data' per contract.

However, in the short term, small content owners are likely to suffer the most if they are unable to pay broadband providers such as BT for high quality delivery of their material.

BT's news also defies the idea of net neutrality, which has caused a stir in the US recently. Net neutrality is the idea that all legal traffic on the internet should be treated equally and that ISPs should be unable to segregate or discriminate, whether in an attempt to stifle competition, or block certain types of traffic.

Last year, communications minister Ed Vaizey hinted that he was open to the idea of two-speed internet. However, Vaizey later said he was against anti-competitive behaviour, and did not support, for instance, BT being able to charge the BBC for faster transmission into people's homes.

A petition, which was sent to Vaizey and culture secretary Jeremy Hunt last month, from 19 organisations including eBay, Skype, Which? and The National Union of Journalists, called for a commitment to enforce net neutrality.

According to the FT, Sally Davis, head of BT Wholesale, rejected suggestions that BT's new network would result in a two-tier internet.  Davis claims that all broadband providers are increasing their download speeds to improve the internet experience.