BT has reduced the level of proposed price hikes for some of its wholesale broadband services following pressure from the industry and concerns that ISPs could go bust if they were allowed to go ahead unchecked.

However, the reduction in the amount extra ISPs will be charged is only small and still means that small ISPs face a hefty increase in overheads.

Last month, the cost of some wholesale services geared towards small ISPs went up by around 30 per cent causing many providers to warn such price rises would force them out of business.

BT insists the price rises are necessary for it to comply with "margin squeeze tests" set by the regulator.

Now BT has re-worked the figures and managed to shave off some of the increase. At a meeting last night between BT and the Internet Service Provider's Association (ISPA), the UK's dominant fixed line telco said the price rises would be reduced by between five or six per cent.

Although welcomed, the cut still means that small ISPs unable to benefit from economies of scale face a wholesale broadband price hike of around 23 - 24 per cent.

"Whichever way you look at it, it's still a big increase for small ISPs," said one industry insider, while another said it was "better than nothing".

ISPA described yesterday's meeting with BT as "constructive". ®

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