ADSLGuide reports that the UK Internet Federation (UKIF), a large group of small and medium sized ISP's, has been outraged by Ofcom's apparent approval of BT's business ADSL (IPStream) price hikes. Many fear closure may be looming:

The group alleges that Ofcom's decision will "put [UKIF members] in a position where they will be unable to compete and will be faced with terminating their business" as it increases the costs to smaller businesses because of BT Wholesale's current portfolio of Capacity Based Charging options with no news on Usage Based Charging at this time.

"This is not really surprising and it is more of the same of what small and medium ISPs have heard from the regulator. Ofcom claims that it wants to promote competition, but it would be very difficult for my company, and for many other ISPs, to compete in what is essentially a non-competitive market." Robert Kemp (Managing Director, KeConnect.

Interestingly the UKIF does report Ofcom as stating that its model 'might be wrong' (due to being based on the economic model of larger providers and not smaller ones, perhaps), but that it would need five years to correct itself! That's too late.

Unsurprisingly the UKIF is now calling for a parliamentary enquiry, specifically to investigate Ofcom's role in regulating the wholesale broadband market. Ofcom appears blinded to the impact on smaller businesses.

This is all rather worrying and now the government, which has a tendency to side with Ofcom, may be getting involved. Sadly that means further waiting.

The real trial of fire will come when and if smaller ISP's start closing, impacting customers.