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ISP fury over BT's broadband claims

Graeme Wearden ZDNet.co.uk

Published: 02 Mar 2004 15:00 GMT

Rival Internet service providers have hit out at BT over the launch of its latest broadband product.

PlusNet has accused Duncan Ingram, managing director of BT Openworld, of being "naïve at best" for saying that BT is the first ISP to break the £20 threshold for a 512Kbps ADSL product. Plusnet insists that it passed this milestone many months ago.

Other ISPs are disputing BT's claim that BT Broadband Basic offers genuine savings, due to the product's start-up costs. BT, though, says there is no mystery about its pricing.

Marco Potesta, marketing director of PlusNet, told ZDNet UK on Tuesday that he was unimpressed by Ingram's claim that BT is the first ISP to offer a full half-megabit service at under £20. "Basically, it's naïve at best. Or, if you've more cynical, then a lot of spin has been put on this announcement using [BT's] position as a trusted brand," Potesta said.

PlusNet charges £18.99 including VAT a month for its entry-level 512Kbps Home Surf product. Although this product doesn't support peer-to-peer applications, Potesta insists that it still counts as a full broadband service. He says that Home Surf can be offered so much cheaper than many other ADSL products because of PlusNet's "extremely efficient" business model -- relying on word-of-mouth recommendations and referrals rather than advertising. Many PlusNet staff, Potesta says, are unhappy about Ingram's claim that BT is the first company to break the £20 barrier.

"A lot of people have worked really hard to drive operational efficiencies into our model. They're now questioning how BT can say the things they've said, and wondering if BT even knows that PlusNet exists," Potesta explained.

A BT Retail spokesman declined to comment on PlusNet's views.

Several other ISPs have claimed that BT Broadband Basic is no cheaper than the telco's original no-frills package, BT Broadband -- which currently costs £27 per month with no set-up or modem charge. Anyone signing up for BT Broadband Basic will have to pay £80 up-front on top of the subscription fee, which opponents say works out as nearly as expensive.

BT, though, is adamant that BT Broadband Basic offers long-term savings. "BT Broadband does offer a free modem to new subscribers, but offers come and go. Who knows what offers will be available in six months?" the BT Retail spokesman told ZDNet UK. "BT Broadband Basic may only be £4 cheaper in the first year, but you don't have to pay another activation fee or for another modem after a year," he pointed out, explaining that the real savings will be realised after the first year.