Level 3 warns of ineffective broadband business model

Existing broadband subscription models are hampering the development of innovative new services, according to Level 3.

James Taylor, Europe, the Middle East and Africa content service product manager at the fibre communications firm, told Computing that current models are ineffective and unsustainable.

Subscribers pay the same amount for their broadband connection every month, he explained, but the amount of bandwidth they consume increases through the growing popularity of services such as streaming and internet telephony.

"That basically means that [internet service providers] have a fixed income and a variable cost, so that business model at some point doesn't work," Mr Taylor commented.

To counteract this problem the Level 3 chief recommended the introduction of small incremental price increases for rising data usage.

He claimed this represents a long-term business model and is "exactly how the industry has to change in order to continue to fuel growth".

Illustrating the trend of rising bandwidth usage, a recent study from Riverbed Technology revealed more than one-third of Europeans are planning to watch action from the Olympic Games online.

Over half of respondents said they are likely to log on to view the men's 100m sprint final.