British Telecommunications Plc has bowed to the pressure from the free ISP movement in the UK and dropped the one pence a minute charge from its Click pay-as-you-use service. While the dominant UK telco has lodged a complaint against Dixon’s Freeserve with the industry watchdog, it is fighting to keep its market share by rebranding its offering ClickFree. The service will also feature information and entertainment content from Excite following BT’s recent $10m acquisition of a 50% stake in the company’s UK subsidiary. Industry regulator Oftel is currently considering a complaint from BT that customers accessing Freeserve are putting a strain on its infrastructure. BT says it is forced to hand over interconnection fees to Freeserve’s telco Energis Plc, which are used to finance the rival service. Philip Lakelin, lead author of a report on independent ISPs published yesterday, believes that the free ISP model could spread in Europe. He predicts that dial-up access providers who fail to achieve subscriber numbers of at least 300,000 are unlikely to remain competitive in the long-term, and that over the next couple of years, the internet services market is likely to grow with the entrance of large players from the communications sector and other industries. This he predicts, will be followed by a period of decline in the overall number of ISPs, as economic and commercial forces begin to tighten their grip.
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