BBC may have to pay iPlayer royalties

ISPs are worried about the bandwidth implications of the BBC's iPlayer

ISPs are in negotiations with the BBC over its iPlayer software and may ask the corporation for royalty fees to cover bandwidth use.

According to reports, major ISPs are seriously worried by the new player because it threatens their own services and may cause a huge increase in demand for bandwidth.

"The internet was not set up with a view to distributing video. We have been improving our capacity, but the bandwidth we have is not infinite," Mary Turner, chief executive of Tiscali UK, told the Financial Times.

"If the iPlayer really takes off, consumers accessing the internet will get a very slow service and will call their ISPs to complain."

The move could be the first in a war to abolish the principle of net neutrality in the UK. This would allow ISPs to price different internet content according to use, and allow companies to buy faster data transmission.

"We are in regular discussions with ISPs and are monitoring the costs associated with video-on-demand," said the BBC in a statement.

"The delivery of TV programmes over the internet is still a very young service, and we can expect everything from service propositions to ISP service packages and consumer electronic equipment in the home to evolve over the next few years.

"We will be playing our part in this, and are working closely with ISPs and consumer electronics manufacturers to deliver the best experience that we can to the audience."