British Telecom (BT), in a nod to the pressure from public, business and government figures, has announced a flat rate pricing structure for Internet calls.
The new tariff, Surftime, offers a range of charges offering unlimited Internet access for a fixed, monthly fee. In a press release, BT says: "BT Surftime will change radically the way Internet access is charged, encouraging more people to get on-line. It will also provide a further boost to businesses looking to take advantage of e-commerce."
Surftime is still awaiting Oftel approval, but BT hopes the new pricing structure will be available from spring 2000. Surftime consists of a range of unlimited usage packages for a single monthly fee.
The Weekend Internet option. For £6.99 per month, this service offers unlimited access at the weekend. During the week the charge is one penny per minute in the evening, and two pence per minute in the daytime.
The Evening and night time option: Also £6.99, this deal offers unlimited access during weekday nights and evenings, Monday to Friday. Calls cost one penny a minute at weekends, and two pence per minute during the day.
The Daytime Internet Option: £26.99 per month, this offers unlimited access during the day, Monday to Friday, with a penny per minute charge outside those times.
The Anytime Internet Option: £34.99 per month for unlimited access during the day, evening or at weekends.
The Pay as you go Internet option: One penny per minute evening, night time and weekend, two pence a minute during the day.
For the first time, BT is allowing ISPs to bill customers through their BT accounts, BT said.
Bill Cockburn, group managing director of BT UK, said: " BT Surftime is the most significant development for the Internet in the UK. Customers can be in full control of how much money they spend online."
"If SurfTime was being launched now, it would be welcomed, but if it is coming out in the spring along with the DSL (Digital Subscriber Line) service, DSL is still the more attractive option," said James Eibisch, research analysis for International Data Corp (IDC).
Industry sources concede that, while this is a major step forward for BT, it remains a puzzle how a company like Callnet 0800 can offer ISP services and unmetered telephone calls, while a huge firm like BT cannot.
The new deal has a catch - its profits model challenges to the existing series of ‘Interconnect’ agreements, under which ISPs take a portion of the amount spent on calls to them made by their clients from the carrier - usually BT. A Reuters report suggests that the new Surftime packages would require a new ‘Interconnect’ agreement between BT and participating ISPs.