Broadband to be metered in 8Mbps future

UK's broadband providers are on the brink of moving away from billing customers on the basis of connection speeds to a model built around the amount of data downloaded.

The move is likely to reinforce the existing broadband divide, as consumers and small businesses in metropolitan areas could end up getting a much faster connection than those in more remote areas, without having to pay more.

The catalyst is BT Wholesale's forthcoming trials into methods of increasing the maximum speeds possible over its ADSL network from 2Mbps to 8Mbps. This testing will begin in April, and UK ISP PlusNet has taken the move as a cue to reshape its range of broadband products.

PlusNet is confident that BT's trials -- which it is taking part in -- will be followed by widespread availability of faster services by the end of this summer. PlusNet announced on Tuesday that from April its broadband customers will be able to get speeds of up to 8Mbps "where available".

"Speed will no longer be a factor in how people buy broadband," said Marco Potesta, PlusNet marketing director, on Thursday.

PlusNet is the first ISP to announce how BT's speed trials will affect its business model. Previously, the price of its Premier product ranged from £21.99 a month for a 512Kbps connection to £39.99 per month for a 2Mbps line. But from April, PlusNet will shift to usage-based charging, where £21.99 will buy 30GB of peak-time data per month plus another 200GB per month -- for a 2Mbps line -- during the night. Customers can pay more to get a larger monthly download limit.

Potesta said that some of PlusNet's 'pay-as-you-go' customers, who pay £14.99 + £1.50 for each GB of data downloaded, will also be able to get speeds of up to 8Mbps from April.

However, BT has not yet given any indication of where 8Mbps services might be available. It's likely that ADSL's physical restrictions will mean that only people living relatively close to an exchange would be able to get such high speeds.

This would mean that some PlusNet customers could pay the same for a 512Kbps or 1Mbps connection as for a 8Mbps one -- good news for surfers in metropolitan areas who are likely to be able to get fast speeds but less appealing for those in rural areas.

Potesta acknowledged that 8Mbps speeds would not be available everywhere, but insisted that from April some PlusNet customers would be able to get such a speed upgrade, depending on where BT carried out its trial.

Potesta also said that most users would be able to get a connection of at least 2Mbps. Until now a standard broadband speed has typically been 512Kbps or lower, but BT Retail upped the ante last week when it announced that all its broadband services would run at 2Mbps apart from its entry level product, which would be speeded up to 1Mbps.

BT Wholesale declined to comment on PlusNet's plans but suggested that 8Mbps connections could be available across the UK later this year.

"BT Wholesale is planning limited trials of the 8Mbps service in April in limited geographies, which haven't been fixed and haven't yet been announced. Subject to a successful trial, BT Wholesale is planning for the service to be available nationally in the autumn of 2005," said a BT Wholesale spokeswoman.