Plusnet offers cheaper wholesale broadband

PlusNet plans to sell broadband connections to small and medium sized ISPs to take the sting out of recent price rises from BT Wholesale.

The move could help keep broadband prices down for customers of the smaller ISPs.

PlusNet claims that the move is a "lifeline" for many of the 70-plus smaller UK ISPs, which face financial challenges after a hike in BT's wholesale IPStream Office services at the beginning of September.

Increases ranged from £2 to £14 per month, excluding VAT. BT put the blame on regulatory pressures from Ofcom over price margins.

PlusNet has now decided to act as an aggregator by buying IPStream direct from BT Wholesale and selling it on to ISPs.

"Yes we want to make a small percentage, but we genuinely believe that the competition of having smaller ISPs which can offer different services or specific content is good for the industry," Marco Potesta, PlusNet's marketing director, told vnunet.com.

He added that PlusNet hoped to offer wholesale broadband to ISPs at prices roughly similar to BT's original charges, or even cheaper because the company can make use of BT's capacity charging which is not a viable option for smaller ISPs.

Although PlusNet is talking to the UK Internet Federation, a body set up by many of the disgruntled ISPs, it will need to wait until the end of next week before knowing whether the proposition is viable.

"We have the platform but the idea may not fly," said Potesta. "There will be two forums over the coming week to discuss BT's user-based charging model and see if the rates for this can be made reasonable for smaller ISPs which cannot use capacity charging."