FRIACO (
Flat Rate Internet Access Call Origination) is a plan offered by
BT for
ISPs to offer unmetered internet access across the
UK for a reasonable cost.
As of June 2000, BT has been required by
OFTEL to offer other licenced operators a method whereby they are given the chance to compete fairly with the
BT SurfTime discount packages. To do this BT must carry internet
traffic over their
copper wires to the local exchanges for a flat monthly
fee.
There have been some problems with the roll out of FRIACO based services, due to arguments as to who is to foot the bill for the inter-exchange traffic which BT claims will increase if people are no longer paying for internet access, but this sticking point doesn't seem to have detered the ISPs, despite having to buy connecting circuits from BT to carry the traffic from the local exchanges to their networks.
There is a "middle way" known provisionally as FRIACO2, where the traffic is part metered and the ISPs pay for the inter-exchange traffic
Information taken from:
http://www.unmetered.org.uk/news/news280500.htm
http://www.getdirections.co.uk/isps/features/friaco.htm
http://www.oftel.gov.uk/competition/fria0500.htm