PlusNet accuses broadband rivals of misleading customers

A senior PlusNet executive has hit out at those in the broadband industry who advertise free or unlimited connectivity, including partner Tiscali.

Marketing director Marco Potesta told ZDNet UK on Thursday that the industry was "mis-selling on free" and wrong to advertise services as "unlimited".

"There's no such thing as free and no such thing as unlimited," Potesta told ZDNet UK on Thursday. "By definition, network is finite, the resources in the network that can be applied to customers is finite. We came clean real quick on that one, but I don't see Tiscali coming clean on that, I don't see other people coming clean."

Potesta also confirmed that several senior PlusNet staff have recently left the company.

A spokeswoman for Tiscali insisted on Thursday that it was not misrepresenting its products. Like many ISPs, it advertises certain of its services as "unlimited" despite the inclusion of a "fair usage" clause that is designed to ease congestion at peak traffic times but effectively serves as a cap.

"We trialled some capped products about a year ago and we found customers really didn't understand what a cap meant," she told ZDNet UK. "We sell, within the ASA's guidelines, an unlimited product — that means we don't put a limit or a cap on our consumer products, but we do operate a fair usage policy".

PlusNet is a wholesale customer of Tiscali's in local loop unbundling (LLU), the process by which Internet service providers (ISPs) can install their own equipment in BT exchanges without themselves being wholesale customers of BT.

However, two weeks ago PlusNet announced it was pausing the migration of its customers onto Tiscali Wholesale's LLU platform so that it could "take stock of the situation". A number of PlusNet's customers had reported problems in the migration, and the company refunded those who had experienced more than seven days of downtime. It has yet to resume the process.

"The LLU implementation had its issues and, had we behaved as we used to behave as an organisation and had the customer at the centre of everything we did, then we firmly believe that these things wouldn't have happened," Potesta suggested.

"Culturally, transparency is a very difficult thing for businesses to get a hold of," he added.

As well as its renewed drive for transparency....

... PlusNet has also embarked on a major "re-organisation" of its management structure following a series of misfortunes.

"We haven't been meeting the expectations our customers have of us, and in many cases we are still not doing so," said a message posted by customer communications manager Ian Wild onto the PlusNet User Group forum on Thursday.

Wild described the "far reaching structural and management restructure" as being "of a magnitude that has not been seen for many years at PlusNet".

The company has blamed much of its misfortune on the "culture change" brought about by the restructuring of its customer support division. One of the most prominent figures to depart has been John Pickerskill, PlusNet's head of customer service and networks. Chief operating officer Danny Sullivan has also left the company.

"Everybody else seems to operate on the basis of systematic call centres and support centres, not the quality of the support," said Potesta. "Our Web site suffered as well because it became more of a transaction engine [than a personalised customer services interface]. If we don't have the customer at the centre of what we do then what kind of business are we?"

The ISP recently suffered the permanent loss of 700GB of its customers' emails, when an engineer accidentally erased the contents of one of their servers. It then emerged that crucial data relating to some customers' Web sites was also lost in the accident. The ISP was further hit by a power outage at co-location facility Telehouse two weeks ago, which also took down ClaraNet and other ISPs.

"In terms of what we've done to mitigate any future occurrence, we've definitely changed our internal processes to make sure human error is far less likely," Potesta told ZDNet UK on Thursday. "There are definitely more eyeballs on the same processes — we've gone very robust as a response".

PlusNet's share price has also taken a battering — losing about three-quarters of its value — since Carphone Warehouse initiated the so-called "free broadband" wars that have seen companies such as Orange and BSkyB weighing in with similar offers. The "free" packages all depend on the customer buying another of the company's products, leading to some scepticism over the term.

Potesta told ZDNet UK that the "myth of free broadband" was beginning to "explode", saying customers "feel cheated by that kind of positioning".

"One thing that these guys all have in common is their complete inability in being able to manage a network, which is something that we are totally transparent on and also do totally effectively," he claimed.