Erik Huggers, the director of future media and technology at the BBC, has outlined plans for a traffic light system to show viewers how well services such as the BBC iPlayer are being delivered by internet service providers. In a speech at the FT World Telecoms Conference in London he argued that maintaining an open and neutral internet is crucial. He was speaking after the communications minister suggested that service providers could charge for improved delivery. The involvement of the BBC in the YouView consortium with the two leading broadband service providers makes this all the more relevant.

Two of the partners in YouView are BT and TalkTalk, the largest broadband service providers in Britain, both of which are planning to introduce multicast and storage systems to offer improved service delivery for video, no doubt at a premium that they would be pleased to charge media providers or end users.

Two of the other leading broadband service providers, Virgin Media and Sky, have their own interests in ensuring high quality video delivery for their customers, most of which are also subscribers to their television services.

The concern is that a two-tier internet will emerge, where media providers or consumers are charged a premium for anything above best efforts delivery of video.

In reality this happens already, with companies paying content delivery networks to distribute their online media.

The very concept of net neutrality has long since evaporated, with many service providers prioritising according to traffic type and restricting certain applications such as peer-to-peer protocols.

The communications minister, Ed Vaizey, told the conference he wanted the market to innovate and experiment with different business models. “This could include the evolution of a two-sided market where consumers and content providers could choose to pay for differing levels of quality of service.” He said “This government is no fan of regulation and we should only intervene when it is clearly necessary to deliver important benefits for consumers”.

The national communications regulator Ofcom appears to favour competition over other considerations. “We see real economic benefit for a two-sided market to emerge, especially for markets such as IPTV,” Alex Blowers, the international director of Ofcom, told a recent Westminster eForum conference on net neutrality.

The European Commission is equally in favour of a light touch, saying that consumers should be informed about network traffic management practices and be able to switch easily to alternative providers if they are not satisfied.

As telecommunications networks and broadband service providers invest in their own capabilities to manage video traffic more efficiently, the risk is that quality of service will be dependent on who pays.

BT and TalkTalk have both publicly said that they would be pleased to offer an improved quality of service for those media providers that are prepared to pay.

BT is marketing its own service as Content Connect. TalkTalk has signed an agreement with Alcatel-Lucent to build its own content delivery network based on the Velocix platform.

The BBC says it is “highly unlikely” to pay a premium for delivery. It already makes use of other commercial content distribution networks but these operate across many different service providers.

So the BBC is developing a function to show viewers in real-time how efficiently the BBC iPlayer is being delivered, with a red, amber or green indicator. Exactly how this will work is not explained but most players incorporate some form of heuristic to respond to changing network conditions, for instance to implement adaptive bitrate streaming.

In practice, it is fairly evident to viewers when online video is not working well. In effect, the BBC will be passing responsibility to the network operators, by saying “it’s alright leaving us”.

For its part, the BBC is promoting distribution using standard web protocols, which allows media fragments to be cached or stored in the network on standard servers, facilitating more efficient distribution.

“We also believe that the industry should embrace and enable multicasting delivery,” said Erik Huggers, “something we have been championing for many years because it would dramatically reduce congestion for live streaming.”

“In addition, we propose to work with the industry to discuss the possibility of a ‘kitemark’ to denote levels of different broadband package capability in simple, easy-to-understand language.”

This is likely to be welcomed by some broadband service providers, not least the partners in YouView, which will want to differentiate their offering, and potentially maintain a premium price point for a service with the endorsement of media brands like the BBC.

In a competitive market, other leading broadband service providers may feel obliged to fall in line, which should arguably benefit the consumer in general. That could leave some broadband service resellers at a disadvantage and ultimately lead to further consolidation of the market. That may be inevitable in any case, but the concentration of services to a few suppliers may limit effective competition.

The irony is that, while effectively promoting the services of BT and TalkTalk through their partnership in the YouView consortium, the BBC needs to ensure its online video is carried efficiently by other service providers, without paying a premium for distribution.

The real issue is not for major media players like the BBC but for less familiar brands, new entrants and innovators. That suits established interests, from national broadcasters to leading broadband service providers and pay-television platform operators. Whether it is in the long-term interest of consumers is another matter.