Free ISPs to get even freer

NEWS Subscription-free ISPs (Internet service providers) could become even cheaper thanks to changes to the Number Translation Service announced by Oftel today. The UK telecoms regulator decided not to alter the interconnection formula that allows ISPs to take a slice of dial-up charges, saying it has created innovation and competition in the market. But Oftel said it is "tinkering with the elements of the formula". BT, which instigated the investigation, will now have a fractionally larger split of call revenues, enabling it to cover the cost of network maintenance. Meanwhile, the terminating operator will gain more control over the retail price. A spokesman for Oftel said: "We are taking the bottom out of the local call rate. Rather than paying an average cost of connection, ISPs will be able to pay the operator for the exact cost of connection, which is often less. It will then be up to the ISP to either pass that saving on to the customer or use it to provide value-add services." He added that the amount of reduction customers could see would depend on "how much the ISP can cut its own costs". User lobby group, the Campaign for Unmetered Telecommunications (CUT) believes this is not going far enough for consumers. CUT co-founder, Erol Ziya said: "We welcome the initiative whereby the terminator can pass savings on to the customer, but it is still a metered service. Oftel has taken the needs of the consumer and put them on the side, while meeting the needs of the telcos." Ziya also expressed concern that this would further encourage ISPs to tie up with telcos - a move that is actively being discouraged in the US. Andy Greenman, senior analyst at Yankee Group, said: "They key to this is that ISPs are getting control of the price. At the moment it is a simple loophole, with an increase in price point options it will become a lot more complex for the ISPs but they will be able to offer multiple tiers of service." No services will be available until the end of the year, while changes are made to BT's billing system. But Oftel assured that the changes are on track and the deadline will be met.