BT is proposing a price hike of up to 30% on certain broadband products that the 'LittleNets' buy from BT and resell to their users. This should be of grave concern to consumers, Government, and suppliers, said the Access to Broadband Campaign (http://www.ABCampaign.org) this afternoon.

"This is important because many of these smaller companies provide innovative and specialist services and services in rural areas which many of the bigger service providers see as unattractive and low margin markets" says Brian Condon of the Access to Broadband Campaign.

There are three types of suppliers in the UK today, say ABC, "Big Telecom" (BT), The AltNets (alternative networks like NTL, Telewest, Energis, Cable and Wireless, Thus, Your Communications etc) and the "LittleNets" (about 150 internet service providers in the UK who provide services in local areas). Over the past 10 years, argues ABC, it is the third grouping of ISPs that has played a significant role in bringing broadband to rural Britain by being willing to invest in local markets which the bigger players see as unattractive.

The proposed increase in price of the IPStream products bought by the LittleNets, which are an integral part of the wired broadband middle mile, is likely to tighten the squeeze on many of these smaller UK Internet Service Providers (the guys who give you access to the Internet) and particularly those in rural areas.  The price rise proposal will have a disproportionate impact on the smaller players while favouring those with scale - the largest of which is BT itself.

"While we accept that the whole area of regulation of these types of services is difficult and complicated," says Condon, "we cannot believe that Ofcom intended that its ruling would result in such a large impact on small, innovative providers who are just the sort of businesses regulation is supposed to protect from players with Significant Market Power."

"Innovation is occurring at the edge of the network, with new services being delivered, such as VoIP (Voice over Internet Protocol). Price hikes in the centre which endanger the future of the LittleNets can only damage UK plc and don't seem to us to be in the best interests of the consumer" he adds (somewhat bitterly).

BT's price increases are due to take place by the end of the month. ABC members will be lobbying MPs to bring this situation to the attention of the Government.

[ends]

Notes to Editors

ABC is an independent campaign group - a 'not for profit' organisation with clear aims and government and industry credibility.

ABC aims to influence the UK Broadband agenda focusing on universal affordable access to broadband with strong views on social and geographical inclusion and demand generation and take-up

ABC partners with industry and the public sector - helping keep thinking 'on-track'

ABC has a significant involvement in major initiatives and events as well as running its own throughout the UK. These include events such as Wireless LAN, The BSG Conferences, its own series of ABC conferences (including Scottish ABC in Aviemore on November 2nd and 3rd 2004) and regional and specialist events and seminars

ABC helps to deliver connectivity and content by working with a network of partner organisations such as the Community Broadband Network (www.broadband-uk.coop)

Contacts: 

ABC Office - 01937 541553
Brian Condon, CEO - 07785 525861
Lindsey Annison - 07967 670759