How UK ISPs have a chokehold on our internet access

Would more ISPs spark innovation?

Remember Pipex, Demon, BE internet and Wanadoo? These were just a few of the independent ISPs that bulked out the broadband market in the 90s and early 2000s. But, ultimately, they were all absorbed by the big six at some point in the recent past.

A lack of competition is bad news in any market. But what's worse is the stifling effect it has on progression. Further, the lack of choice means there's no genuine alternative when the government of the day goes on another censorship crusade.

TechRadar spoke to a collection of internet gurus and ex-CEOs of ISPs for some insight into why the independent ISP disappeared and what that means for the future.

Big six dominate

Between 1990 and 1998 there were 19 independent ISPs operating in the UK. In 2014, those very same ISPs have either been absorbed by the big six (BT, EE, Sky, Virgin, TalkTalk and Plusnet), or are now completely defunct. Although there are some independent ISPs still operating such as Zen internet and Andrews & Arnold, they remain very much on the fringes.

While the consolidation of companies is common in any market that's as big and established as the ISP market, Cliff Stanford, former CEO of Demon internet, thinks that the nineties was a far more innovative time for UK ISPs because of the range of companies operating:

"Everything was about innovation [in the nineties], every step had to be designed and rewritten. A good example was the London Internet Exchange".

The London Internet Exchange, or LINX, is a mutually governed internet exchange point that was set up in 1994 and still exists today. It solved the problem of ISPs having to link to each other to share bandwidth, as Stanford explained:

"In the early days we had to interconnect to Pipex otherwise all of the traffic had to go across the United States and back. But what happened was that UK Net also wanted to interconnect with us, so they had to put two wires in, and then BT wanted to interconnect with all of us, so they had to put three wires in.

"Finally Janet, which was the main centre for computer networking in those days, wanted to connect to all of us, but it didn't want to spend money on four wires. So Keith Mitchell, who runs the UK internet forum, came up with this concept of an interconnect in London and LINX was born.

Innovation wane

"But now, with fewer ISPs operating, there's far less innovation, because there's no need for it. The innovation between 1992-98 was enormous, the innovation between 1998-2014 has been minimal and nothing really has changed.

"The only thing that has changed is more bandwidth, more people with it and so on. The technology is identical, we're still using email clients and we're still using the same web that came out in 94-95".

Shaun Fensom, the founder of former ISP Poptel, agrees that the lack of competition has stifled innovation, and that's largely because of a race to provide the cheapest broadband:

"It's about competition at all layers of the value chain. This is the big problem. For small ISPs it's really hard to get access to dark fibre or affordable colocation. It's easy to resell stuff, but that leaves you without anything really to differentiate from the competition, and very small margins.

"Most ISPs are selling the exact same things - Virgin has the biggest difference because it has its own infrastructure. In Stockholm small ISPs can buy directly onto the Stockab dark fibre - then they can build a hundred different products."

The affect on the customer

But the lack of competition also means that consumers have less choice in terms of what kind of service they're offered. Fensom explains how he started Poptel as an ethical ISP: