Unlimited broadband may 'disappear'

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 CNET.co.uk's sister site ZDNet.co.uk, Armstrong said that the iPlayer service had "gone from zero per cent of [UK traffic] to five per cent 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 per cent 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".