The BBC is fighting a battle it can't afford to lose against internet service providers like BT, Virgin Media or Sky Broadband as it promises to use its clout to maintain net neutrality.
A two-tier internet ecosystem would spell disaster for BBC and many other big content producers on the market and could have a more devastating effect on the nascent UK video on demand market.
By deciding to voluntarily withdraw as a referee, the government has tacitly given its assent to what could be a new virtual cartel that could decide the type of content we watch and ultimately what we consume as information.
There are currently four big players in the broadband market that account for most users; BT, Talktalk, Sky Broadband and Virgin Media.
The last two have obvious vested interests in video content delivery systems and the first two are known to be actively working to become active players in the triple play market.
All together, they could force content producers like the BBC, Channel 4, ITV and others to cough money to get better access to content or worse, in the case of Virgin Media or Sky, provide their own content for free while charging for third parties.
The end of net-neutrality in the UK may kill services like 4OD, iPlayer or Youview as content producers find it too expensive to maintain them and refrain from passing the cost over to the end users.
Jim Killock, executive director of the Open Rights Group (ORG), said that this could reduce innovation and people's ability to exercise their freedom of expression.