British Telecom will announce this week a new pricing plan for data transmitted over its lines. BT will submit a new "service provider tariff" to The Office of Telecommunications (Oftel), the UK telecom regulator, which could make flat-rate Internet access services commonplace in the UK.

The new service provider tariff, which will be available from mid-December, will give Internet Service Providers (ISPs) direct-dial access to IP (Internet Protocol) ports for £140 per month. This fee will include an average of eight hours of usage per day; additional usage will be charged at less than 1p per minute, according to a statement.

ISPs will also have the power to determine how long users may stay online without interruptions.

Under the new rate structure, ISPs can set their own charge for unlimited usage over a set period of time. For example, if an ISP dedicates one port for every 14 users, the ISP will be paying £10 per month to BT for each customer.

In theory, an ISP would then need to charge each user £10 to break even, but this may not be what happens. "Companies launching now are already offering 0800 access," said an Oftel spokesman, referring to the toll-free prefix in the UK.

Users of "free" Internet services in the UK that do not use a toll-free number now also pay BT for the price of a local call, which can cost between 1p and 4p per minute, depending on when the call is placed. But the new ISP tariff could encourage more use of toll-free numbers.

"It really depends on where they're generating revenue from, because a lot of revenue now is coming from advertising," said the Oftel spokesman, who asked not to be named.

Oftel, which sets the prices of telephone calls, will also be announcing a new pricing plan near the end of this month, according to the spokesman. "We are currently looking at a plan which would charge a different rate for data calls and voice calls," he said.

BT will also invest more than £100 million over the next two years in technology to optimize its network for Internet use, the company said.