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So it's official: breathe is back. It has abandoned its flat fee unlimited surfing business model and, as anticipated, re-launched itself with new business model which it hopes will make some cash.

Rather than the original £50 one-off fee for unlimited access, the company has joined the real world and is now offering a FRIACO based subscription service for £15 a month.

The modern-urbanist ISP collapsed in spectacular fashion at the end of last year, with debt rumoured to be as high as £50 million. It was bought by Great Universal Stores (GUS) for £1.4 million. The deal was hammered out between December 22 and 29 last year.

Sean Gardner, breathe's COO, told The Sunday Telegraph: "We were trying to convince people that the business had a future and we succeeded - even in a week before Christmas when there was almost no one around in the City and those who were around were barely sober."

While there was no doubt that the un-metered model was a bad idea, commercially, the demise of breathe has been attributed to more than just difficulties with rubber cheques.

Industry gossip suggests that breathe's management felt that the founder, Martin Dawes, was not totally committed to the project.

The article in the Sunday Telegraph quotes an "industry insider" as saying: "Martin is an entrepreneur but he really never got into it as he did with mobile telephones. He was also sceptical of the valuations around in the dotcom world. When Morgan Stanley came along there was an opportunity for an exit for him, as well as for Chase and 3i."

A breathe spokeswoman said that she could not comment on such speculation. ®

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