Internet service providers (ISPs) have accused BT of fudging the figures after the telco claimed on Thursday that it would introduce large wholesale broadband price cuts from 1 May.
BT has cut the flat rate wholesale price for consumer broadband from £14.75 to £13 per month, and slashed more than 50 per cent off the cost of IPstream business broadband ADSL products.
But rivals claim that BT is clawing the consumer cuts back through less-trumpeted pricing changes, and that its business cuts will stifle competition as they only apply to IPstream products, which are routed entirely through BT's network.
DataStream, an alternative uses competing national networks and offers greater flexibility and better pricing.
BT chief executive Ben Verwaayen claimed that the cuts "would boost the [broadband] market even further". But ISPs have called on Oftel to investigate.
They maintain that the way BT has presented the changes will mislead the public into thinking that they will pay less, when the overall price to providers has actually risen.
Although monthly rental costs have been reduced, and BT has provided an additional 25p discount for ISPs signing up more than 10,000 customers in a month, activation per person costs have risen by £25 and the annual cost of renting central pipes has increased by around 20 per cent.
AOL claimed that the changes represent a rise to ISPs of about £6 per person per year. "There is no price cut to pass on to the consumer," said a spokesman.
BT shrugged off the remarks. "Some ISPs are cutting prices... we can't please all of the people all of the time," said a spokesman.
Even cutting costs for the 500Kbps, 1Mbs and 2Mbs ADSL IPstream products hasn't impressed ISPs, which have suggested that it will stifle competition.
BT said it had made the cuts for IPstream only as it hadn't yet achieved the same economies of scale for DataStream, but ISPs claimed the move was simply anti-competitive.
"Most of BT's actions in the past 12 months have been designed to kill the development of DataStream and to prevent competition," said Sergio Cellini, UK chief executive at Tiscali.
Phil Male, chief operating officer at Thus, added: "A significant reduction in the wholesale cost of IPStream without a corresponding reduction in the wholesale cost of the DataStream service will discourage innovation and competition in the market for broadband services.
"Time and again BT has only reduced its prices when forced to by competition. If there are no competitive pressures in the market, a dominant operator can use the opportunity to set artificially high price points.
"Consumers, both business and residential, will ultimately pay the price."
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