Time is running out for so-called "unlimited broadband" packages, according to analysts and internet service providers.

For some time, many ISPs have been offering users what they call unlimited broadband, although it almost always comes with some kind of "fair usage" cap on downloads. PlusNet has been one of the few providers to buck this trend — preferring instead to offer packages based on fixed download caps — and is now warning that the emergence of IP television and the BBC's iPlayer will make it impossible for its rivals to continue marketing their packages as "unlimited".

"2008 will be the year of IPTV," said Neil Armstrong, PlusNet's product and marketing director, on Thursday. Speaking to ZDNet.co.uk, Armstrong said that the iPlayer service had "gone from zero percent of [UK traffic] to five percent in two months", and this explosion in high-bandwidth usage meant ISPs would have to either explicitly charge for the actual amount of data used by customers or operate at a loss.

The popular video site YouTube is also believed to provide around 10 percent of all traffic on the internet — and if it goes "high-quality", as it is expected to do soon, this figure is likely to go up.

"Where it's going to be a big problem is ISPs selling unlimited broadband with a 'fair-use' policy," said Armstrong. "[Users on such packages will] hit that figure and [their] line will slow down, and [they] are going to get a nasty surprise. This is happening right now."

Asked whether this meant those who consider themselves to be "light users" of the internet but now use services such as iPlayer will have to pay more, Armstrong agreed. "Somebody somewhere is going to have to pay, which is why we are very clear about what our products [involve]," he said. "It's not just a single-price, all-you-can-eat market any more." He said he hoped there would be no "unlimited broadband" offers being advertised in a year's time, because they are, in his view, "dishonest".

Armstrong added that, while business customers "don't fall for advertising as easily" as consumers might, the increasing prevalence of home-working using home broadband connections meant a change in tariffing could affect some businesses. He also said that increasing consolidation in the broadband market, together with the massive increase in data traffic brought about by consumer video services, would force many small ISPs to go business-only or be swallowed up by larger rivals.

Michael Philpott, principal analyst at Ovum, agreed with PlusNet's views on "unlimited broadband". "[Such offers are likely to disappear] quite soon actually — I would say within 12 months, simply because you hear it more and more," he told ZDNet.co.uk on Friday. "At conferences where the likes of Tiscali and BT are present, you hear them say these things — 'We must move to a new tariffing scheme' — and that tells me they're working hard on this. The challenge for them is doing it in a way that keeps them competitive — there is a first-mover problem."

Philpott said business models for ISPs would have to change as a result of increasing traffic. "It is up to you as an ISP to make the business case work by designing your network around that [leased or owned] pipe," he said. "It only makes sense if you can split the pipe across as many customers as you possibly can — if end customers increase in terms of bandwidth, you can fit less customers in a pipe and you are therefore paying more per customer. If you're charging £15 [per month] fixed then eventually your costs outweigh [your income]."

Those operators who owned their own network, rather than leasing connectivity from BT Wholesale, would find themselves in the same boat, Philpott suggested. "You're buying Cisco or Juniper routers or whatever, which have a certain amount of capacity, so you are having to purchase more and more hardware to be able to keep control of your customers," he said.

"You will start to see new tariff schemes come out onto the market," said Philpott. "The market will try to not look like they're punishing people — they will try to spin it as 'You want to be a homeworker, upgrade to this package and pay extra'. If you're not willing to pay, then you unfortunately get put to the bottom of the pile. ISPs are heading towards segmenting their customers."

A spokesperson for Orange, one of the UK broadband providers that offers "unlimited broadband", told ZDNet.co.uk on Friday that "consumers are becoming increasingly sophisticated in their broadband use and multimedia services are driving increased demand and consumption".

"Orange continually reviews and refreshes its packages to meet consumer needs," the spokesperson added.

Source

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well its up to the isp,bt to make it go faster then i have m8 who has been installing fibre optic cables in sewers for internet use and he said the speeds that can be acheived are phenominal so the providers have to move on.

if i could have a unmetered pakage i would pay for that privilage and those that dont wanna pay then,hey stick to the bargin basement.why should i suffer

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I am with ADSL24 and you get what you pay for no FUP, port blocking ect

It costs me £29.99pm and i have 60GB peek and 330GB off peek usage, seems all the big isp's have stopped this "unlimited broadband", i think AOLuk was the last biggest isp to stop unlimited usage last February

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optics in UK would be nice lol.hell of a cost atm tho.same as satellite connection.instead they're banging on about 3g for portability etc.roll on 24cn i say,thats if BT bring it in to play before we all end up with 1gb a month to play with lol

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I am so envious.
I pay A$70 / month (+ A$30 / month line rental) for 20gb peak + 40gb off-peak.
And thats probably the top deal in Oz.
If anyone knows a better deal, let me know. Please.

But the point is that this poor situations is likely to get even worse.
Downloads and uploads are likely to be counted in all cap totals.
Off peak times are also likely to contract (less hours).

I'm really trying to feel sympathy for all these poor users who are going to have their unlimited quotas trimmed a little ... but its so hard.

The guy is bullshit. ISPs need to STOP charging per bandwidth, and upgrade their networks to support more bandwidth. 6Mb/s is NOT broadband. Verizon FIOS at least offers real broadband speed. Anything less than 10Mb is a porr excuse, though. Providers in most of the world are perfectly capable of supporting the bandwidth required to allow voice, internet, TV, and other services. It is the US providers (and possibly any following their example) that refuse to put in place the infrastructure to support real broadband. China has had symmetric gigabit services for years, and will soon have symmetric 10Gb services, and the US claims to lead the world in "innovation"!? Where the hell is that kind of service here, then? If they're operating at a loss, then they simply need to remove their heads from their asses and charge a reasonable price that allows them to profit while maintaining their customer base. If the US economy is screwed so bad that they can't manage that, then good luck living through the next few decades This country is well on its way to collapsing under sheer stupidity. Big companies hoarding all the profit they can will only work for so long before the people they expect to buy stuff from them can't afford it anymore...

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