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Powernet lays off staff with spam

ISP network provider is first victim of BT's wholesale unmetered package
Written by Wendy McAuliffe, Contributor

ISP network provider Powernet Telecom called in police Friday to disperse angry staff as it fell victim to the new telecoms landscape in the UK.

BT's long-awaited roll out of Friaco -- its wholesale flat-rate access service -- has put pressure on network providers such as Powernet, which will no longer be needed now that ISPs can buy flat-rate access from the local exchange from BT. While most of the Internet industry welcomes Friaco, staff at Powernet were less than happy to be told via email Friday that their services would not be required Monday.

Many ISPs simply resell connectivity from network providers, allowing the ISP to focus on content and branding aspects of their business.

The thirty evicted staff were sent an email informing them that the company could no longer afford to pay their wages, and were told not to take equipment from the building under threat of police action. Greater Manchester police confirmed that an incident took place at Powernet Telecom's luxury £5m offices on Friday. "Police officers were summoned to prevent a breach of peace that involved 30 employees," said a police spokesperson Monday.

The company's operations director, 22-year-old Richard Barlow, informed staff of their dismissal by email, and then remained in his office along with Ian Carey and chairman Lord Huntly while police escorted employees off the premises.

Powernet Telecom postponed a £600m floatation earlier this year, which was to create 500 new jobs in the next 12 months. The firm was created by business tycoon Ian Carey in 1993 as a network provider for ISPs, but additionally set up its own ISP totalserve.com. Analysts have criticised the wisdom of Totalserve, as it effectively placed the company in direct competition with its customers.

David Lewin, director of telecom research company Ovum, believes the days are numbered for ISP network providers with the rollout of Friaco. "The circuit-switched network providers are going to get increasingly squeezed, as they are in a temporary position that is able to make money only in the short term," he says.

ZDNet News was unable to reach Powernet to find out the current status of the firm. Energis denies reports it is about to sign a deal with the network provider.

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