Sky 'may regret removing caps'

Sky could come to regret its decision to remove usage restrictions from its broadband services, according to an analyst.

Michael Philpott of Ovum said that the company's decision to remove its fair usage policy from its Sky Max package may be somewhat short-sighted as it would be difficult to reverse.

"By removing the fair usage policy on its Sky Max service and making a commitment to its clients that there will be no network congestion, Sky is giving up any control it may have had on the consumer's usage," said Philpott.

Many ISPs use strategies known as traffic shaping or traffic management to ensure that every customer can get a guaranteed quality of service (QoS) and won't be affected by the few customers that are particularly heavy downloaders.

However, Sky is doing away with this, claiming that its broadband network, which is unbundled and therefore not reliant on BT's infrastructure, is more than capable of handling demand.

"History shows us that once 'no restrictions' services have been marketed, especially if they are held up as market differentiators, it is then difficult to go back on this and reintroduce restrictions at a later date," said Philpott.

"It will now be difficult for Sky to market any future tariff system based on network usage or QoS," he continued.

Philpott also predicted that other ISPs may find themselves faced with a difficult choice after Sky's decision.

"Such a move may well have a knock-on effect, forcing others, whose networks may not have such spare capacity, to remove their fair usage policies or other network restrictions," he said.

www.ovum.com
www.sky.com