British Telecom (BT) will announce next week it’s cutting prices ...

end-to-end service (CD Aug 16 p4). It has met with the U.K. ISP Assn. (ISPA) and the U.K. Internet Federation (UKIF), a group of more than 70 small and medium-sized ISPs. Last Thurs., the BT spokesman said, the company met with ISPA to discuss IPStream. BT raised its prices for the products in anticipation of an Office of Communications (Ofcom) requirement on the margin between IPStream and DataStream, BT’s local access product, the spokesman said. When the decision came down, however, some numbers were lower than the telco had anticipated, so BT is now reducing its prices by 5% to bring them in line with Ofcom’s figures. The lower rates -- which Ofcom will have 28 days to review -- will be published next week and retroactive to Sept.1, the spokesman said. The price cut amounts to about 90 pence off BT’s original increase on IPStream products, an ISPA spokesman said. ISPA members are happier than they were, he said, but they're still talking “quite constructively” with BT about the costs. Another issue of concern to ISPs is when BT will introduce usage-based charging (UBC), under which ISPs pay for the amount of data they transfer along BT’s fat pipe. Under the current capacity-based charging (CBC) system, ISPs are charged as if they carried 5,000 customers per main pipe even if the actual number is much smaller. Last week, BT reassured ISPs it’s on target to launch UBC this year, the BT spokesman said. It’s important that ISPs work with BT to get UBC and CBC right, the ISPA spokesman said. Service providers hope UBC will help solve the issues of BT’s price hikes for smaller ISPs, he said. BT’s announcement that its UBC launch is on schedule is “good news,” the ISPA spokesman said. BT’s price reduction is really only BT giving back the 7% increase it “accidentally” overcharged when it acted on Ofcom’s order before it was published, a UKIF spokesman said. “This does not yet represent a change in the price structure on CBC but is really a rebate,” he said. The 5% cut isn’t the “big news we were hoping for,” the spokesman said.