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ISPs tackle Ofcom over BT broadband price hike

'Discourages healthy competition '

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UKIF - the United Kingdom Internet Federation, the recently created trade body which represents more than 70 ISPs - is meeting officials from Ofcom today amid worries that BT has unfairly increased the cost of certain broadband products.

Around a third of BT's wholesale broadband customers (ISPs) are rebelling against recent rises in the wholesale cost of business broadband, claiming that if allowed to go ahead it could drive them out of business. UKIF says that regulatory intervention and recent price hikes by BT are skewed in favour of the big ISPs such as AOL UK, BT, Tiscali and Wanadoo that are able to make use of different ADSL products.

Speaking ahead of today's meeting with the communications regulator, Robert Kemp, MD of The KeConnect Group, said: "Many ISPs are devastated by the news and will be fighting the changes with both BT and Ofcom. The price increase, of up to 30 per cent, is set to discourage healthy competition and diversity in our market sector, this must be stopped."

At the beginning of August, BT Wholesale wrote to ISPs informing them that it would increase the cost of its BT IPStream Office and BT IPStream S products from September 1. At the time a spokesman for the company said: "We didn't think it [the price rises] would be popular but it is something we had to do."

In a teleconference with BT this week UKIF said that the UK's dominant fixed line telco once again reiterated that the price hike was "unstoppable" and had been made to ensure that it complied with new rules set by the regulator.

Said Stephen Dyer, chairman of Mailbox Internet: "UKIF is hopeful that its meeting with Ofcom will have an outcome of improving the consultation process so that Ofcom recognises the whole of the industry, and furthermore will reevaluate its existing regulatory process. Competition, innovation and a range of suppliers are fundamental to forcing down the cost of broadband services and furthering choice for consumers.” ®

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