Internet service provider (ISP) Freeserve has said that consumers will have to pay £600 a year for broadband internet access, laying the blame for the price hike at the doors of both BT and Oftel.
The ISP will raise the price of its broadband service from £39.99 to £49.99 per month, which works out at an extra £120 a year. The company put the blame on BT's monopoly of the broadband market and Oftel's slow action in rectifying the situation.
"This has been forced on Freeserve because we have no confidence in BT, or the regulator, in driving down the wholesale price to a level which will facilitate large-scale take-up of broadband in the UK," the company said.
BT has two subsidiaries which sell broadband: BTOpenworld, which offers high-speed access directly to customers; and BT Ignite, which sells broadband on a wholesale basis to other ISPs.
But a recent survey by Oftel found that UK users were paying significantly higher prices than consumers in France, Germany and the US.
Freeserve attacked BT's allocation process for ADSL capacity as the root of continuing high prices, and said that the state of the broadband market in the UK "has made it virtually impossible to plan an effective marketing strategy to create consumer demand".
Meanwhile, NTL has announced a strategy which flies in the face of Freeserve's announcement, launching broadband access models for small businesses.
Users can opt for either a 500Kbps or a 1Mbps service, with contention ratios of 15:1. The services cost £90 and £125 a month respectively, for unlimited usage. But there is also an installation fee of £220.
Despite the high prices, Stephen Rowles, managing director at NTL Business, said: "The technology industry has been hyping the benefits of broadband, but so far few companies have been able to deliver."
He added that it will be rolled out initially to small businesses on local networks, but that later technologies would make broadband available on a nationwide scale.
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