Ray of hope for broadband ISPs

BT's shock wholesale broadband price rise has been thrown into reverse

BT has decided to partly reverse the price hike of some of its business broadband products.

The telco confirmed on Monday that it has revised its calculations, and will now not be upping the cost of its IPStream Office and S range by the 30 percent initially quoted. Instead, the new prices are expected to be around 5 percent lower than previously thought.

The move has been given a cautious welcome by the UK Internet Federation, which represents many of Britain's smaller ISPs.

"It's a step in the right direction, but BT is still effectively handing back something it took away in the first place," said a UKIF representative, adding that the reduction was more of a rebate than a real saving.

As reported back in August, BT's shock decision to raise its high-end IPStream prices was sparked by Ofcom, which had decided that BT's prices were unfairly low. BT made its move before Ofcom's official announcement, and it appears that BT went further than Ofcom felt was necessary.

UKIF has been warning since the price rise that its members face ruin.

BT is hoping to persuade these smaller ISPs to abandon IPStream altogether, and move to a new charging structure where they are billed for the amount of data they use, although to date they've been cool towards the Usage-Based Charging (UBC) model.

In mid-September the Internet Service Providers Association (ISPA) met with BT to discuss UBC. ISPA subsequently complained that BT's UBC pricing was likely to be too high.

But BT insists that UBC is good news for ISPs.

"The cost of UBC will be comparable or better than before [the IPStream price rises]," said a BT Wholesale spokesman.