LONDON -- DSL providers usually don't guarantee the speeds they advertise. But the ISPs here are testing their customers' patience as they try to contend with wholesale rate hikes and increased retail price competition.

Speaking of competition, the U.K. has overtaken France as Europe's largest broadband market, racking up 9.8 million broadband lines, according to Point Topic Ltd. (See UK Tops Euro Broadband.)

With demand so high, service providers are frantically trying to outdo each other by offering customers lower prices and higher bandwidths -- without upgrading the capacity of their networks to deal with all the extra traffic. The result: Users end up with contention ratios of up to 50:1 -- where every user is sharing bandwidth with up to 49 other people.

ISP PlusNet plc 's "Beginner's Guide to Contention" likens broadband users to greedy pizza eaters in a buffet -- there's only so much to go around, so users should "appreciate that bandwidth is a limited resource" and "adopt a responsible attitude." Of course, the buffet could provide more pizza.

Part of the problem is the way service providers get their pizza. When ISPs buy a pipe from BT Group plc (NYSE: BT; London: BTA), they're paying the incumbent based on the amount of capacity they use. So the temptation is to cram in as many users as possible on the same limited amount of capacity before they upgrade to a bigger pipe.

As Richard Thomas, CEO of Net Evidence (SLM) Ltd. , notes, "Providers are basing their services on things like [BT's] IPStream where the cost of the central office is huge. If you're running that, it's tempting to max out the bandwidth."

NetEvidence, which provides a network performance reporting service, monitors around 2,000 sites and is seeing disgruntled broadband users realize their connections aren't performing the way they expected.

Thomas points out that contention problems have coincided with a change in BT Wholesale's pricing model. Under the standard model, ISPs paid BT £40,000 (US$70,600) per year for a 155-Mbit/s central office, which would accomodate around 8,000 users, and then an additional fee for each ADSL line. But under the capacity-based pricing scheme introduced in 2004, the cost of the same 8,000-line central office rose to a flat rate of £316,200 ($558,157) per year, no matter how many users are actually connected -- hence the cramming.

BT also introduced a usage-based model, which works on the assumption that the average user will consume 20 kbit/s, equating to 200 megabytes per day. As the daily average has inched up to 300 and 400 megabytes, ISPs are losing more and more money on subscribers.

"Consumers will put up with a lot," Thomas says. But "the people who are downgrading from leased lines are getting fed up with it... We've watched sites where they've replaced leased line with DSL and you can see the quality drop."

Thomas says one of the biggest problems is the way ISPs are marketing their services, downplaying the limitations of the technology -- distance from the exchange, slower upstream, delay, and so forth -- to sell speed by the pound. "They're so darned cheap," he says. "They're taking a complex network and trying to sell it simply." Companies who are sold DSL as being "leased line at a fraction of the cost" are "let down when they start to see they can't run class-of-service over it."

Ethernet service providers like Exponential-e Ltd. and THUS plc (London: THUS) are going back to using E1s as backup for corporate branch offices that don't need high-speed Ethernet connections, because, although they're more expensive, they provide uncontended capacity. (See THUS Deploys Overture.) Thomas says he's seen people returning to ISDN lines because their broadband connections were unable to carry voice -- a trend that should alarm providers looking to roll out VOIP.

Some ISPs -- for example, Demon -- offer business-grade services that claim contention rates of 5:1 or 1:1. But its consumer service is contended at 50:1, and customers have responded by airing their frustration on Websites like slowdemon.co.uk. Similarly, broadband user forum ADSLguide.org shows providers like PlusNet, Tiscali SpA , Claranet Ltd. , et. al., getting the thumbs down from users.

Service providers that fare better tend to be local loop unbundlers like Easynet Ltd. that can upgrade the exchanges themselves as needed. But local loop unbundling (LLU) has been slow to take off -- there are only 122,000 unbundled lines in the U.K. -- and even then there have been hiccups.

Bulldog Communications Ltd. 's well documented problems with connectivity and customer service culminated in an investigaton by industry regulator Ofcom ; and LLU provider Be Un Limited , which began trialing 24-Mbit/s ADSL2+ services in September, has also been having a hard time with its customers.

"We definitely had some issues early on in terms of making sure we had all the right pieces in place," says Dana Pressman, Be's managing director. The provider was unprepared for the amount of bandwidth customers would be consuming and decided to pull back its marketing efforts to concentrate on getting the service up and running.

"We've been seeing a much higher usage than what we would've anticipated based on our projections and talking to other service providers," says Pressman. "We're seeing about four times what we expected."

The growth of high-bandwidth applications has exacerbated the capacity problem. "Once you start to introduce applications like games and VOIP, which aren't bursty, it changes the nature of the traffic," says Thomas at NetEvidence. ISPs have attempted to rein in bandwidth by capping monthly usage, but the nature of applications themselves has changed. No longer are users just surfing the Web and checking email; they're running always-on applications: streaming audio/video, VOIP, gaming, file sharing... the list goes on.

Point Topic expects 2006 to the year of local loop unbundling in the U.K., and BT has recently cut its LLU rates to stimulate competition, so users will be looking to the new infrastructure to clear the traffic problem in the coming months. (See BT Cuts LLU Prices.)

— Nicole Willing, Reporter, Light Reading