Merry Christmas and happy Michaelmas term, UK residents! Eat that figgy pudding and wassail while you can; once Christmas is over, ISPs around the island are climbing aboard the deep packet inspection train and planning to ride it all the way to Profit-in-the-Wold. Charging broadcasters more money to deliver content and selling their users' clickstream data to third-party advertising firms like Phorm are just two of the creative ways that ISPs want to use the "business intelligence" provided by DPI.

The quite brazen profit-making scheme at work here has three components. Not every ISP is using all three pieces yet, but all rely on similar back-end technology. If ISPs become (and their customers) grow comfortable with any one of these DPI uses, it certainly becomes easier to roll out variations on the theme.

Squeeze broadcasters

TV's transition to the Internet is well underway. Satellite and cable broadcasters can already make money from carrying offline channels into the home, and ISPs want in on the game. Never mind that the people on both sides of such connections already pay market rates for their bandwidth, or that this money propagates through ISP networks thanks to transit and peering connections between ISPs—it's much easier for ISPs to complain instead about freeriding media companies and the huge problems caused by HD video.

According to Tuesday's Financial Times, ISPs are hoping to put the squeeze on broadcasters. Virgin Media, in particular, "said that it expected new business models to involve payment from broadcasters for delivering their high-definition content across its fibre-optic network."

Other ISPs want revenue from the "Project Canvas" set-top box project that public broadcasters are designing in order to bring Internet-delivered video to the TV.

Companies like Tiscali have also singled out video services like the BBC iPlayer and suggested that the BBC needed to pay for all of the demand it was placing on the network.

Throttle BitTorrent

While legal video delivery presents opportunities for ISPs to cash in, the same doesn't hold true for illicit video distribution. And what tool is widely used for such distribution? BitTorrent.

According to The Register, Virgin Media has just indicated its plan to start restricting BitTorrent traffic in 2009. Currently, the company has an application-agnostic approach to throttling traffic, one which it claims provides excellent quality to 95 percent of its customers during peak usage times. Shifting away from the scheme doesn't appear to be a bandwidth management issue, therefore, so much as a desire to get involved in helping content owners police content.

It all sounds a bit like the Comcast case, but in reverse. In the US, an FCC decision against singling out one particular protocol (whether or not it was being used legally or illegally) prompted the cable ISP to move towards an agnostic filtering solution that should soon be fully deployed. In the UK, regulators don't appear to have the same problems with ISPs deciding which protocols to favor or disfavor, and the public outcry over the issue has been muted.

Sell clickstream data

The same might be said for services like Phorm and NebuAd, whose business model basically went bust in the US this year as Congress showed strong resistance (and help multiple hearings) to its plans. Both companies use DPI appliances installed within ISP networks to analyze user visits to web pages and the content of those pages; users are then slotted anonymously into ad categories, and web pages that elect to use the system will serve highly targeted ads to these readers.

Despite controversy over the scheme and BT's role in conducting secret trials of the technology, it hasn't attracted the same level of resistance in the UK that it received in the US. With its trials complete, BT announced this week that it was going ahead with a Phorm partnership.

No details were provided, though UK regulators have already signed off on the technology. Regulatory approval apparently comes with an opt-in requirement, though, making the product substantially better than the opt-out approach previously being considered (and used in all major US tests of the technology).

Overblown?

Taken together, the three approaches to monetizing an ISP network might sound terrible to the ears of Internet lovers, but let's listen again and see if we can't hear a slightly sweeter song among the din.

The most spectacular charge of the three above, that a major UK ISP would move away from agnostic throttling to single out BitTorrent, was a Register exclusive that came from an interview with Virgin Media's boss. But is it true?

"It's not true," said Asam Ahmad, a Virgin Media spokesman, in an interview today with our sister publication Wired. "There are no changes planned in our traffic management policy."

(I know what you're thinking—a Register story that's less than completely accurate? Shocking!)

How one can get something this specific wrong remains unclear... unless Virgin Media is flat-out lying. But CEOs are generally quite careful about saying things like "We're going to throttle BitTorrent next year!" when reporters are in earshot, without thinking such a statement through first.

This, after all, is the company that says right on its own website that BitTorrent is a tool so awesome that "once you try it you'll never know how you managed to live without it."

And the Phorm story, while certainly true, at least appears to address the most common complaint about such services: their opt-out nature. It's not clear how Phorm and BT will encourage people to opt-in to a service that only promises "better ads!", but we assume they have a plan.

So, while UK ISPs certainly use a different playbook than those in the US—many of the big ones send out notifications to users flagged by the music business for illegally sharing music, for instance—the difference remains one of degree. If Tiscali demanded payment for carrying valuable content, remember that the demand came only years after AT&T boss Ed Whitacre made similar comments in the US, comments that in part spurred public interest in the entire net neutrality issue.

Network neutrality debates have been smoldering of late, but this week brought them roaring back to life. With the Wall Street Journal claiming in a confusing piece that Google was backing off its own support for network neutrality and the recent interest in ISP news from the UK, anyone interested in the debate has ample reason to start shouting about the topic once more.