Tiscali is to offer broadband net access at the same price as dial-up.
Tiscali are offering a cut-price, lower speed option
For £15.99 a month, the service provider will offer a 150Kbps connection, three times faster than a dial-up link.
"The new offer gets rid of the price gap between narrowband and broadband," said Steve Horley, Tiscali's net service director.
But analysts and net providers are sceptical that the low speed will offer the broadband experience people expect.
Most people can get a standard broadband connection of 512Kbps for about £30 a month, although there are higher speed products available at a price.
Tiscali's recently appointed Chief Executive Mary Turner told BBC News Online that their new product was for people who want a faster connection that what they get with their dial-up 56kbps modem.
"There is a whole section of the population who want the broadband experience but do not require the 512Kbps speed or do not want to pay £30 for it."
She added that many cable net access providers offer the broadband speeds of 150Kbps, so Tiscali were opening up the choice for ADSL (Asymmetric Digital Subscriber Line) customers.
Tiscali hope the cut-price package will attract about 20% of the UK net access market, which BT Openworld, Freeserve and AOL currently dominate.
With 80% of the UK able to access broadband services, Tiscali say their move will inject more competition into the high-speed net access market.
But BT were sceptical of the announcement.
"Tiscali are really just dressing up a basic product launch with spin," a spokesperson told BBC News Online.
"All they are doing is announcing yet another product, which other companies are already offering."
He added that competition between high-speed net service providers was already healthy.
People expect to do a lot with broadband
In a report last month, the government's E-commerce Minister Stephen Timms said the UK is more competitive than its European G7 neighbours and the USA.
Broadband analysts from Jupiter Research were wary too, suggesting that 150Kbps was not really true "high-speed" net.
"They are offering a carefully cultured bonsai broadband product which is really aimed at creating a product to get people away from dial-up," said Jupiter's Ian Fogg.
"The cut-back speed does not really offer the full broadband experience that customers expect," he said.
"It won't deliver rich content like video, audio, fast downloads, and online gaming."
Across the European broadband market, service providers are finding a number of different ways to compete and offer lower prices.
While some are reducing the speed of a broadband connection, others are making higher speeds only available at evenings and weekends.
Some are even experimenting with metered broadband access.
"We'll probably see over the next months a number of other providers offering cut back, barely there broadband products," said Mr Fogg.
"But they may all do it differently."
Some analysts say Tiscali's decision could help to encourage more people to move to broadband.
"It's very positive news for the UK broadband industry in a couple of ways," said Patrick Bossert, Principal Strategist at Atos KPMG Consulting.
"Broadband uptake in the UK is at a critical point. Early adopters have bought it up to now, and it's on the verge of reaching mainstream adoption.
"Tiscali's offering at this price-point is perfectly timed and will help to grow the market from a much broader customer base, rather than compete for existing customers."