By Chris Wynn

The debate over who should foot the bill for ever-increasing video traffic on broadband networks rages on – now behind closed doors rather than in the press I might add – but content owners and internet service providers appear unlikely to reach a solution soon.

The popularity of the BBC’s iPlayer online-video service has been the catalyst for a debate on who should pay to carry video traffic amid wider discussions about next-generation access networks.

Tiscali has been one of the more vocal ISPs and has called for content owners – particularly the BBC – to contribute towards distribution. This prospect has been dismissed by the Corporation and communications regulator Ofcom has expressed reservations about such a model.

Plusnet, Sheffield-based ISP, which was bought last year by BT, has been offering some fascinating data on iPlayer usage, which will no doubt add fuel to the fire – although that’s not their interntion.

The latest figures reveal that iPlayer traffic accounted for a whopping 10 per cent of internet usage over its network in peak times during March and April.

This is up from between zero and five per cent [of usage] in January, just after iPlayer launched.

Apparently, the 10 per cent figure isn’t drastically different to what other ISPs are seeing either.

Plusnet isn’t moaning about this though.

In fact they welcome the success of iPlayer but said that operators that were unable to meet bandwidth requirements for the BBC service would need to adapt their business models.

And they can’t wait for the launch of Kangaroo as well, as it serves to differentiate Plusnet broadband from the ISPs whose networks are creaking under the weight of video traffic. Plusnet expects iPlayer usage to continue to rise, although not at the same pace.

Plusnet last week increased its usage allowance in response to extra demand for video. Customers who were allowed to download 8 Gigabytes per month can now download 15 Gigabytes, while those who could download 20 Gigabyte can now download 30 Gigabytes. There has been no increase in prices and overnight usage remains free.

Plusnet is a small ISP compared to the likes of BT, Virgin Media and Carphone Warehouse – it has about 300,000 customers – but its philosophy on broadband gives some interesting clues as to how the sector is set for a shake-out.

As Neil Armstrong, the company’s director of product development told me: “Many [ISPs] have a good structure in place [but] those guys that have ‘unlimited’ offers will be in big trouble. Other ISPs need to react.”

Indeed, the ISPs that are shocked by the sudden increase in video traffic on their networks shouldn’t really be surprised. It’s just taken a product like the iPlayer to really get the debate moving.

Chris Wynn covers this issue in greater detail in this week’s New Media Markets.