The UK's top two ISPs remain unimpressed by BT's reincarnated Surftime as the telco tells ZDNet that unmetered services will fail.
As predicted by ZDNet News, BT has been forced to slash the cost of Surftime in response to cut-price deals from AltaVista and ntl. The new improved Surftime II offer drops the £34.99 monthly price-tag for unlimited surfing to £19.99.
Despite agreeing to offer UK surfers unmetered access however, BT does not predict a happy future for such services. Because ISPs will no longer benefit from a share of the telco's telephony revenue "they are going to fail", a spokesman claims.
Surftime II will not be sold direct to consumers, instead it will be targeted at ISPs. Any new tariffs based on Surftime II, therefore, represent wholesale prices only and may not actually represent what the consumer has to pay.
BT insists there are "no hidden costs", a claim AOL disputes strongly. "For them to say there are no hidden costs is inaccurate," says an AOL spokesman. "In fact the costs BT gives only accounts for half the connection."
According to AOL, under Surftime II BT is only charging ISPs for carrying the call from the customer's house to its local exchange. There will be an extra charge for carrying the rest of the call -- the 'second leg' -- to be borne by the ISP. BT admits it will charge ISPs more for the second leg and says it is yet to firm up a cost. Experts say this represents a true hidden cost because it will force ISPs to pass the as yet unknown charge on to consumers.
BT denies it has misled its customers. "We have said that ISPs may put an additional charge on the service, but customers aren't interested in how that extra cost is broken down," a spokesman says.
Freeserve is still considering whether it will sign up to Surftime. CEO John Pluthero says he is not impressed with the latest version, describing Surftime II as a "very clumsy model". Freeserve will offer some form of unmetered access but, for the present, is keeping its options open. "We will use Surftime unless we can come up with something better ourselves," Pluthero tells ZDNet in an exclusive interview.
Gartner Group analyst Adam Daum agrees it will be a struggle for some ISPs to support the cost of unmetered services but believes they have little option. "If Freeserve, for example, doesn't respond soon to the week's events, it will have the shortest FTSE listing in history," he says.
Guy Kewney thinks BT is simply making excuses. Go to AnchorDesk UK for his opinion and the news comment.
How much did you think you'd pay for unmetered access following Wednesday's announcement? How much more will you pay? Tell the Mailroom