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BT examines broadband price cuts

Small ISPs' wholesale misery relieved?

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BT is looking at ways to reduce the cost of some of its broadband products after being forced to increase prices by regulator Ofcom. On Wednesday, BT upped the cost of some of its wholesale broadband products by as much as 30 per cent in a bid to comply with new "margin squeeze" regulations set by Ofcom.

However, the telco is looking at the figures once again to see if there is any room to bring down wholesale prices while still remaining compliant with the new margin squeeze test set by Ofcom. Even if BT is able to make some adjustments, The Register understands that these are unlikely to be big enough to calm the nerves of some small ISPs which claim they face financial ruin because of the price hikes.

Despite this, UK internet trade group - ISPA - remains "encouraged" by the "sympathetic" response it got from BT following a meeting to discuss the recent price hikes for wholsale broadband services. On Wednesday, the same day that BT's price rises came into effect, ISPA met with BT to discuss a number of options that the UK's dominant fixed line telco could consider to help ease the financial burden on small ISPs.

Not only did the trade group argue that the increase in costs would hammer smaller ISPs, it also said the speed with which they were introduced also clobbered some providers. Indeed, rival ISP trade group - UKIF - reckons the price rises will cripple some providers and lead to a number of them going bust.

However, following Wednesday's meeting BT Wholesale's Bruce Stanford, said: "We welcome the opportunity to work in a constructive way with the ISPA to find solutions that will help mitigate the impact of recently applied price increases."

A spokeswoman for BT said that the telco was looking at its figures once again and if there is scope to reduce costs, these reductions will be made. However, she stressed that any adjustments are only likely to be "very small" since the telco has to work within the boundaries set by regulator Ofcom.

In a statement, Jessica Hendrie-Liaño, Chair of the ISPA Council said: "I am encouraged by BT's sympathetic response on this issue."

However, one industry insider told The Register that ISPs wanted more than a "sympathetic response" from BT and demanded instead that ISPA and the regulator did more to prevent them being forced out of business. ®

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