A new service from British telecoms provider BT that allows Internet service providers to pay for higher-quality video delivery will not create a two-tier Internet, BT said on Tuesday.
BT was responding to concerns raised in a Financial Times article that its new wholesale offering violated the principle of net neutrality, which says all Internet traffic should be treated equally.
Allowing powerful content providers to pay for premium delivery could put smaller players at a competitive disadvantage to the likes of Google's YouTube or the BBC's iPlayer television catch-up service.
The FT said BT's Content Connect would give broadband providers the tools to create a two-tier Internet.
But BT replied: Contrary to recent reports ... BT's Content Connect service will not create a two tier Internet, but will simply offer service providers the option of differentiating their broadband offering through enhanced content delivery.
BT supports the concept of net neutrality but believes that service providers should also be free to strike commercial deals should content owners want a higher quality or assured service delivery, it said in a statement.
Share in BT were up 2.8 percent to 185.8 pence by 1103 GMT (6:03 a.m. ET), one of the top gainers in a 1.5 percent-stronger European telecoms index.
BT says Content Connect -- being trialed by its retail arm and soon to be offered to external wholesale customers -- delivers better-quality service by storing bandwidth-hungry content like video closer to end customers.
On its web page advertising the service, it argues Content Connect allows Internet service providers (ISPs) to earn extra revenue from delivering Internet video, as well as improving the viewing experience for consumers.
ISPs such as TalkTalk and AOL struggle to make much money from charging consumers for broadband access in a fiercely competitive and commoditized market and are keen for new, more profitable revenue sources.
In the United States, communications regulators adopted net neutrality rules last month that prevent providers from blocking lawful content but still let them ration access to their networks.
Europe has so far taken a wait-and-see approach to regulating the issue.
(Editing by David Holmes)