Freeserve puts the broadband boot into BT

NEWS Two of the UK's biggest ISPs are at war again, with Freeserve chief John Pluthero accusing BT of unfairly favouring its own subsidiaries. BT Wholesale, which supplies internet access services to ISPs, is meant to treat BT's ISP BTopenworld like all its other customers - a so-called 'Chinese wall' is meant to prevent any privileged communication between the two, even though BTopenworld is wholly owned by the BT Group and housed in the same headquarters. However, John Pluthero, CEO of Freeserve, isn't satisfied the 'wall' is working and has taken his complaint to Oftel. Pluthero believes BT is trying to engineer "dominance" in the marketplace, which he says will have "significant long-term consequences for the health, vibrancy and competitive nature of the broadband market as a whole" - not to mention Freeserve's revenues. BT has aroused Pluthero's anger for two reasons. Firstly, he has attacked BT for using Group resources to promote BTopenworld, which it is forbidden from doing by Oftel. He also believes BTopenworld was given advance notice by its parent of BT Wholesale's plans to cut the price of broadband, enabling it to time its marketing campaign to hit just after the new prices were announced on 26 February. He said: "The Chinese walls that are supposed to exist between BTopenworld and BT Wholesale may be fooling Oftel. But to the rest of us who understand the lead times needed to bring a new product to market it's obvious those walls are paper thin." BTopenworld launched a £10m marketing campaign very shortly after BT Wholesale cut the price of broadband to less than £15, allowing ISPs to cut the end user price to half its previous levels. Last week BT trumpeted a dramatic increase in its number of subscribers, from 3,000 to 8,000 per week, ahead of the price cuts coming into effect on 1 April. This was boosted by BTopenworld's massive marketing campaign, including TV, cinema and two million CDs, deployed just "weeks" after the broadband price cut was officially announced, a Freeserve spokeswoman said. Freeserve too plans a "large" campaign, she said, but has not managed to do so yet because of the lead time required to plan a big marketing push. BT flatly denied its Chinese walls aren't working. A spokesman said: "We wholly refute the allegations. We made the announcement [on broadband] on 26 February to all parties equally. It is one of BT's priorities to ensure that we do not act in an anti-competitive way."