Critics: Net dialup price cuts mean more in BT coffers

Cheaper phone calls for Net access may be a useful marketing tool, but they may just be reinforcing BT's metered charging system.

Cheaper Net calls negotiated between large ISPs and telcos are benefiting BT far more than consumers, according to the Campaign for Unmetered Telecommunications (CUT).

The recent flurry of save-as-you-surf schemes are, according to CUT, putting more cash into BT's coffers and allowing it to maintain a tight grip on access charges. "These deals are causing a terrible amount of confusion for consumers as new packages are announced month by month," says Alistair Scott, chairman of CUT. "Revenue goes back to BT in the end. Even with deals like screaming.net BT is still behind it, making money".

As the government promises cheaper access costs and critics accuse Oftel and BT of dragging their heels on the issue, ISPs are desperately seeking out short-cuts to cheaper Net calls. Screaming.net is already offering free weekend and evening calls and on Monday both AOL and Freeserve announced lower tariffs.

CUT claims billing per minute is holding back uptake and use of the Internet in the UK and is campaigning for flat-rate access. Scott believes the interim schemes introduced by ISPs are merely "disguised billing by minute". CUT is calling on e-Minister Patricia Hewitt to make negotiation details more open and illustrate exactly how BT is benefiting.

AOL refused to discuss details of its negotiations but admitted the deal was only a stepping stone towards unmetered access. "Obviously a flat-rate system is the ideal but we are not prepared to wait for changes in the regulatory structure," an AOL spokeswoman said. She agreed Oftel was dragging its heels on the issue of unmetered access. "Timing is an issue and Oftel has said it could be a three or four year wait, which is a hell of a long time in Internet terms," she said.

Scott Moore, analyst with research firm IDC, believes ISPs will keep on carrying the burden of access charges for the foreseeable future. "The only other way is to force BT to reduce charges," he said. Moore believes this will happen through competition rather than regulation. "Change may come with cable operators. Telewest and NTL may decide to introduce flat rates which could force BT's hand."

BT admitted it gained revenue from cheaper access deals. It denied it was not doing enough to encourage Internet use, pointing to recent price cuts. A BT spokesman refused to be drawn on the possibility of flat-rate access. "It is constantly under review," he said.

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