Virgin can’t compete with Sky for content. It already tried and, famously, Lost. What remains on Virgin’s VOD service is a shadow of the packages Sky offers.

What it *can* compete on is unmoderated bandwidth. Sky (and BT, who run their own VOD service in the form of Vision) have plausible business reasons for kicking file sharers off their networks – they’ll do it so they can sell them the content instead. So if Virgin can just give up trying to sell their weak content package they can compete by selling unmoderated bandwidth to file sharers.

I don’t see “freeing up bandwidth” as a plausible motive. Bandwidth utilisation follows the standard power laws. If they want to kick the very heaviest users off to free up bandwidth the standard trick is a “fair use” clause. They don’t need to threaten most of their users to achieve that. But if they ban everyone from even moderate file-sharing the demand for anything but the smallest pipe seems likely to dry up – who’s going to pay for a 10meg pipe just to check email?

So it must be fear of a court case or a change in the laws. That sucks – that a business decision to sell your customers the thing they want is made impossible by a barely-plausible legislative / litigious threat. Yet alas that seems to be where we are.

Virgin can't compete with Sky for content. It already tried and, famously, Lost. What remains on Virgin's VOD service is a shadow of the packages Sky offers.

What it *can* compete on is unmoderated bandwidth. Sky (and BT, who run their own VOD service in the form of Vision) have plausible business reasons for kicking file sharers off their networks – they'll do it so they can sell them the content instead. So if Virgin can just give up trying to sell their weak content package they can compete by selling unmoderated bandwidth to file sharers.

I don't see “freeing up bandwidth” as a plausible motive. Bandwidth utilisation follows the standard power laws. If they want to kick the very heaviest users off to free up bandwidth the standard trick is a “fair use” clause. They don't need to threaten most of their users to achieve that. But if they ban everyone from even moderate file-sharing the demand for anything but the smallest pipe seems likely to dry up – who's going to pay for a 10meg pipe just to check email?

So it must be fear of a court case or a change in the laws. That sucks – that a business decision to sell your customers the thing they want is made impossible by a barely-plausible legislative / litigious threat. Yet alas that seems to be where we are.