BT cuts line costs for ISPs

BT has bowed to industry pressure and reduced tariffs for ISP's running dial-up access services. However, some ISPs are sceptical, even suggesting that the service it's proposing could be anti-competitive.

The UK telco plans to introduce a new tariff structure for ISPs in December that will bundle 56 hours of free Internet access a week with each port connection.

But a spokesman for UUNet said: "This doesn't provide what ISPs want - we need a more flexible approach. It won't help ISPs provide anything of much interest, for example, to the significant number of small businesses that still use dial-up Internet access."

Managing Director of AOL UK, Karen Thomson, agreed: "The proposed scheme will not meet consumer need for an end to metered access. We are also concerned that the new tariffs do not remove any of the financial risk for ISPs wanting to offer flat-rate access."

BT calculated that service providers could offer up to 18 hours of free Internet access per month for a flat fee of £10, based on the premise that they connect 14 users to each Net access port.

However, Tim Pearson, chairman of ISPA criticised the premise. "This is a vast over assumption - ISPs that want to offer a quality service will have a ratio as low as 2:1 and that would make the offer a very expensive alternative," he said.

Concerns have also been raised about the service's anti-competitive nature, as it may force ISPs to switch telco provider to take advantage of the offer. In addition, the offer will only be available to ISPs connecting more than 10,000 ports, excluding the small and medium-sized operators. Keith Mitchell, chairman of the London Internet Exchange (LINX) warned: "Excluding the smaller ISPs creates a disadvantage for the industry."

BT maintains that the criticism is unfair given that it has yet to finalise and announce the exact details of the service.