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Tuesday, 22 August, 2000, 14:28 GMT 15:28 UK
Altavista blames BT for 'fiasco'
Altavista UK has confirmed that it never launched its much-hyped service to give users unmetered internet access, but blamed BT for failing to provide the lines it needed.
The service was due go live in June, but the company now says it was never turned on, disappointing some 270,000 users who signed up.
Altavista's UK managing director, Andy Mitchell, told the BBC that he was "absolutely remiss" in not telling people sooner about the problems.
Speaking on Radio 4's Today Programme, he said that BT has promised to provide flat-rate circuits by September, but they would not now be available until January.
"The whole industry is a fiasco. A lot of people are dependent on BT for this service. Altavista alongside other companies are the symptom, not the cause" of the problem, he added.
Altavista is advising the thousands of people who signed up for the service to opt for one of its other offers. These either restrict how long users can stay online, or ask them to pay their telephone charges.
Altavista says it will be meeting Oftel, the industry regulator, next week to complain about BT's behaviour.
Some rivals carry on
BT has denied that it is blocking progress on unmetered access, and says it has offered wholesale flat rate lines to its competitors in response to Oftel's concerns.
"We had no discussions with them prior to their announcement. They appear to have promised to launch a product with no network provider set up, no sustainable business case and no customers," he added.
Freeserve, the UK's biggest ISP with two million customers, says it will continue to provide its flat rate, unmetered access for 140,000 users.
A Freeserve spokesman told BBC News Online that it was "unfair" of Altavista to blame BT when they had not made any arrangements with any telecoms company in advance of their highly publicised offer.
"Everybody in the industry knew about these issues," he added, saying that Freeserve and its telecoms partner Energis were in negotiations to increase their capacity for unmetered use.
And World Online UK editor-in-chief Richard Ayers said that Altavista had only been interested in short-term gain. World Online, which also runs its own telecoms service, would be continuing with its own unmetered access service, he added.
In March this year Altavista promised to change the way people used the internet in the UK by launching an unmetered surfing service.
Anyone signing up for the deal would pay a low annual or monthly fee for their net access and would never have to pay call charges again.
In June, when the service was due to be switched on, Altavista announced it would then be charging £60 per year for the service and was restricting the numbers that could sign up.
In July, an Altavista spokesman told BBC News Online that the service was up and running, although he declined to say how many customers were participating in what he called a "controlled roll-out".
Campaigns and searches by national newspapers, internet magazines, online news sites and ISP chat sites ISPReview and Net4Nowt failed to find a single subscriber.
Now the reason has become apparent: the service was never switched on and no-one was invited to use it.
Companies struggle to make money out of the unmetered services because, although surfers pay next to nothing, ISPs currently have to pay network provider British Telecom the full telephone bill.
Later this year, a new charging regime will be brought in, which is set to change the situation.
Known as Friaco, for Flat Rate Internet Access Call Origination, this charges ISPs for the number of lines they take from BT rather than the amount of traffic flowing over them.
In the past month, two companies, LineOne and CallNet 0800, announced they had to stop offering unmetered services, arguing the business was not viable.
Companies still taking on subscribers - which include Freeserve, RedHotAnt and NTL - are restricting the numbers that are signing up in an attempt to keep the service manageable.
Despite the problems there are still many ISPs offering unmetered access. To offset the cost of providing the service, most charge monthly fees or require people to make a certain amount of voice phone calls per month.
The collapse of unmetered services by well-known companies is having a knock-on effect. Last week Freeserve said that its network is starting to getting jammed as more people try and subscribe to its unmetered service. It said it was stopping publicising those services until mid-September.
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