Industry experts believe that the debacle over BT's throttling of peer-to-peer (P2P) use by its ADSL users could have damaged consumer confidence in broadband, at a time when the UK's IT industry needs the incumbent telco to be doing all it can to boost the take-up of high-speed Internet services.
Yankee Group analyst Andy Greenman believes that home Internet users could be put off from buying BT's broadband service. Other ISPs who sell ADSL services could also suffer, Greenman warned. He predicts that the episode could benefit ntl and Telewest, as it might encourage users to invest in their cable modem offering instead.
"Admitting to port throttling will add further doubt over the incumbent's broadband capabilities," wrote Greenman in a research note published this week. "Consumer confidence may be damaged."
"ADSL costs £40 per month in the UK, well beyond the reach of most Internet users. Loss of interest in BT's ADSL offering will also impact on Freeserve and AOL, which are both trying to push their own ADSL services." Greenman added.
BT admitted to its broadband customers last week that it was imposing traffic controls that would restrict access to some peer-to-peer services. Many users were angered by this, in large part because for several weeks BT had denied that it was doing any such thing.
After a storm of bad publicity in the press and on TV, BT announced that it was cancelling the P2P port-throttling. "It was a mistake, and we've apologised for it," Duncan Ingram, senior vice-president of BT Openworld, told ZDNet. Ingram added that BT's error was in the way it explained its actions, and insisted that some actions need to be taken to manage a network effectively. BT has declined to say what network management strategies it will employ in future.
Many users, however, were startled to learn that a service which they pay £40 per month for would not allow them to, for example, download music files. "Customers will feel cheated if limitations are suddenly imposed," warned Greenman.
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