June 30, 2009 11:00am by David Farrar

Sky online

Pay television giant Sky is planning to hit the pause button on its Sky Online site, saying the service does not make sense in the current New Zealand broadband market.

Fellet said: “We did this to make subscribers feel better about our service but it has not been a great viewer experience.”

Viewers were using up their broadband capacity and then becoming unhappy with Sky when they passed data limits and their internet service provider (ISP) dropped them back to dial-up speeds.

I agree such a service will be greatly limited by data caps. But assuming Sky hosts its content locally, and hosts it in a site that peers with the major ISPs, I would have hoped that such local traffic could be excluded from data caps. It is the international bandwidth that is the big problem.

TVNZ was the first broadcaster in Australasia to launch a full online catch-up service and nearly all of of its prime-time shows are available through this service. Each week nearly 250,000 New Zealanders stream 1.5 million shows to their homes, Paris says.

Some TVNZ traffic has been through a relationship with the state-owned ISP Orcon, which has allowed its subscribers to access the TVNZ ondemand website without affecting data caps.

Orcon executive Scott Bartlett said data caps remained an impediment partly because there was only one “pipeline” from New Zealand allowing internet traffic from the United States – the source of a lot of internet traffic.

He said there were also issues over Telecom charges for data transfers.

This is why peering locally is so important. People should be able to download locally without it affecting their data cap.