BT rejects claim its Content Connect service will erode net neutrality by allowing ISPs to charge for faster delivery of content

BT today rejected claims it is paving the way for a "two-tier" internet by creating a service that will allow broadband providers to charge the BBC, Google and other content companies for better delivery of their video to the nation's homes.

The telecoms company's wholesale arm is starting to sell a new service that allows broadband providers – such as Virgin Media and Sky – to put video from paying clients, like the BBC's iPlayer or Google's YouTube, in an internet fast lane.

BT's new service, dubbed Content Connect, has provoked accusations of breaching the broad principles of "net neutrality", whereby all content is delivered equally to internet users.

The BBC's traffic-hungry iPlayer and other video-on-demand services are putting an increasing strain on internet service providers' networks, many of which argue that they should be able to charge for better delivery of these companies' content.

But BT today denied claims the new service will create a two-tier internet, saying that it "supports the concept" of net neutrality but believes that ISPs should be free to charge content owners for a "higher quality" delivery service.

"Contrary to recent reports in the media, 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," a BT spokeswoman said.

"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."

BT, which is the largest broadband provider in the UK, has already been in fights with the BBC over the amount of bandwidth used to stream iPlayer content. In November the BBC said it would introduce a traffic light system on the iPlayer, where users could easily see if their viewing was being hampered by their internet provider.

Other large internet providers including Virgin Media and TalkTalk have also openly expressed a willingness to charge content companies for better delivery of their video to the nation's homes.

Sally Davis, head of BT Wholesale, said providers had expressed "considerable" interest in the network, which is expected to launch in the spring.

The service, which has been in development for more than a year, will operate on an opt-in basis for ISPs, giving them the tools to improve users' online viewing experiences by using a new digital delivery network.

Content Connect enables ISPs to store video within their own networks, closer to the user, as opposed to third-party companies – such as Akamai, which delivers the BBC's iPlayer – caching popular content around the globe. By paying the ISP, rather than the third-party company, users could get a guaranteed delivery of service even at peak times.

But it would also create a situation where companies that are unwilling – or unable – to pay would have their content delivered less efficiently to the end user.

Jim Killock, executive director of consumer campaigns organisation Open Rights Group, said: "We are talking about ISPs competing with the internet for content delivery. Whether films, music or gaming services, the idea is that ISPs will deliver this stuff better and more reliably than the internet.

"The result could be a fundamental shift away from buying services from the internet to bundled services from ISPs: which would reduce competition and take investment away from internet companies. That would be bad for everyone."