Had a very interesting meeting with a major IP services company this week, at which I had a chance to discuss some of the offers of free or very low cost broadband, from the likes of Carphone Warehouse and Pipex.
Basically, from what I've learned, these deals are loss leaders that are forcing a number of other ISPs into offering lower and lower rates, even to the point where they are effectively supplying their service at cost (i.e. wholesale price).
AOL is reported to be so cheesed off with the situation that it's looking to sell off its UK and European IP infrastructure, and then offer its online service via the Web free of charge.
I'm cheesed off, I must confess, as my business ISP is Pipex, from whom I've had excellent service over the last couple of years, and I'm worried that the low-cost deal (£6.50 a month) the ISP is offering will degrade my service.
After chatting with more than a few pals in the industry, I've concluded that UK market will split into a two-tier Internet, with free/low-cost users on one side, and serious users on the other.
The former will probably get slower speeds at peak times and have to put up with other rubbish, such as their ISP accidentally deleting several days worth of their email, as has happened over at Plus.net.
The latter will get the kind of service that most broadband users have had last year - i.e. excellent.
The overall effect, however, won't be good for the market. It will stifle innovation and cripple the prospects for value-added services, including security.
The Net will also, I predict, become a hacker's paradise.
And now it looks like several ISPs are running scared over the uploading of files via their networks using P2P service.
Talk about hypocrisy...