BT Unveils Its CDN Plans

BT Wholesale is preparing to launch a content delivery network (CDN) service to British ISPs that are buckling under the strain of increasingly heavy video traffic loads.

Ryan Hardy, a senior product manager at the wholesale division of BT Group plc (NYSE: BT; London: BTA), tells Light Reading the new offering, called Wholesale Content Connect (WCC), will be launched as a pilot service before the end of 2009.

He says the main reason for offering the service is "to address video over broadband, including the Canvas project." Canvas is a joint U.K. initiative led by broadcasters British Broadcasting Corp. (BBC) and ITV plc (London: ITV), along with BT, to develop a standardized way to deliver broadcast-quality, on-demand video services over the Internet. (See BBC, BT, ITV Team Up, BBC Consults on IPTV, and More Light Shed on the BBC's Canvas.)

Hardy says the idea behind WCC is to "make broadband a video platform. It's important to get ISPs into this value chain, and it will enable ISPs to charge content providers for the delivery of their content." For example, ISPs could charge the BBC for the delivery of its increasingly popular iPlayer on-demand service, which has put some ISPs' access and backhaul connections under considerable strain.

(It's worth noting here that U.K. cable operator Virgin Media Inc. (Nasdaq: VMED) is building its own internal CDN to deal with iPlayer and other video applications. See Virgin Media Weighs CDN Options.)

Hardy says the service will be a "next-generation CDN. It will have functions that will give our CDN service unique selling points, such as QoS [quality of service] and broadcast-quality TV capabilities," something a traditional CDN service provider such as Akamai Technologies Inc. (Nasdaq: AKAM) can't offer, he claims.

"We'll be able to do targeted ad insertion and provide the set-top boxes. This is all about giving the ISPs the tools to build a new service. It's something they've been looking for since they experienced the impact of the iPlayer," demand for which is still growing fast: According to the BBC, there were 11.2 million iPlayer download requests in January 2008, but by December 2008 this had risen to 41 million.

The iPlayer launched in July 2007 and quickly began clogging up the U.K.'s networks. Hardy says once the problem became clear, BT set to work on "reducing our costs internally, and now we're looking to pass on those cost benefits to the ISPs. But it's not just about reducing costs -- it's also about creating a new revenue stream." The ISPs see Canvas, which aims to make it easy for any content owner to get its products to end users with a high level of service assurance, "as a great revenue opportunity."

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