Ihug’s recently launched all-you-can eat 128kbit/sec DSL account may be the first package of its kind in the market but doesn’t go far enough to encourage people to use more media rich services because no-ones making any money, says Mr Shand.

"We’re trying to help customers use more intensive content but we can only do this on the Jetstream starter package, even then the customer has to pay $29 to Telecom on top of the ISP fee so it’s still pretty ugly,"

He says its impossible to compete against Sky if you don’t have speed and you’re charged by the megabyte. He says at the higher bit rates Telecom still has direct access to Ihug’s customers and continues to direct market to them.

While the all-you-can eat Jetstream starter package invokes a sense of dejavu from the ISP that toppled the dial up internet charging model eight years ago it’s not enough for ihug to get back into providing video services.

Back in 1999 it was engaged in serious set-top box software development and promising to deliver up to 42 channels via its satellite service. The plan fell apart and all that remained until six months ago was a pay-per-view system in a few hotels and motels. The digital TV transmitter and remaining boxes are now gathering dust in the ihug basement.

"We never really had the marketing muscle to drive our IDTV offering. Sky lost millions getting their service to profitability but we didn’t have that kind of resource behind us. It was just too hard, admits Mr Shand. – Keith Newman