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PlusNet throws broadband 'lifeline' to ISPs

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PlusNet says it's "thrown a lifeline" to the UK's small ISPs facing a 30 per cent increase in the wholesale cost of broadband. PlusNet reckons that if enough small ISPs consolidate their orders through the Sheffield-based ISP, it can make the cost of wholesale broadband much cheaper for small service providers.

Said Marco Potesta, marketing director at PlusNet: "Having looked at the situation, we believe that smaller ISPs can leverage our existing DSL platform and get back to the cost structures in place prior to the recent price rises. We also believe this can be done in such a way that not only is customer ownership and product development retained by the relevant individual ISPs, but improvements in quality of service can also be gained."

At the beginning of the month BT increased the cost of certain wholesale business-focused ADSL products to ensure that the monster telco complied with new "margin squeeze" tests. Concerned that small ISPs could go to the wall because of the price hikes, more than 70 service providers clubbed together to form UKIF, a new industry group.

While UKIF lobbies Government, the regulator and BT for change, PlusNet has already begun canvassing small ISPs to see whether enough interest can be pooled to make the plan a reallity. It is also planning to hold an open day next week when ISPs can meet to discuss the plans.

"We are making this public release to alert UKIF representatives of our proposal. PlusNet is committed to facilitating the way forward but we must emphasise that action needs to be taken quickly to ensure a successful outcome," said Potesta.

Although PlusNet has already received interest from some ISPs, UKIF gave a luke-warm reception to the idea. A spokesman for UKIF described PlusNet's offer as a "sales pitch" insisting that the ISP had "jumped the gun". However, he said PlusNet's move "showed the level of anxiety in the industry concerning this price rises". ®

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