There is a rumour doing the rounds that any company receiving a ringing endorsement from Tony Blair will soon be forced to make a declaration to the Stock Exchange.

Blair's desire to be associated with anything of a technological bent is starting to have a profoundly negative effect upon those companies on which he confers his blessing.

First, the rather unloved software company Dialog - recipient of a much-paraded (parodied) supportive missive from dotTony - suffered such ignominy in the market that it had to change its name to Bright Station. Now Alta Vista is the pariah of the internet sector.

The Prime Minister rightly acknowledged the significance of the US firm's decision to become the first internet service provider to offer UK users an unmetered surfing package. The joy of unmetered access, the argument runs, is that users feel free to spend far longer online than when paying by the minute. Bingo, an e-business explosion.

Now, of course, it is a question of hasta la vista Alta Vista. The company was unable to deliver on its promises and last week was humiliatingly forced to pull the service. The damage to its credibility is profound. Whether users will ever take it seriously again is open to question.

Not surprisingly, BT's director of regulatory affairs, Ian Morfett, was quick to plunge the knife, describing AltaVista as a victim of its 'ill-considered marketing hype'.

This is certainly true. AltaVista had learnt the lesson of Freeserve, the first ISP to drop upfront charges and which, subsequently, through 'first mover' advantage, came to dominate the UK consumer internet sector. Blimey, AltaVista thought, it's obvious that getting in first is the way ahead by offering unmetered access.

The omens for offering an unlimited package were good. Earlier this year AltaVista had got wind of an Oftel ruling that would force BT to offer wholesale unmetered packages to ISPs.

AltaVista figured it could start to offer unmetered access, take a hit to build market share, and wait for the cavalry to arrive in the form of the Oftel ruling. AltaVista figured wrong.

Flat rate internet access call origination (the whizzily acronymed friaco, copyright: a lawyer at AOL) was not the great solution the UK's telecoms and internet companies had been hoping for at all. It was not even unmetered. Instead it was a hybrid - and a very ugly one to boot.

Yes, BT offered unmetered packages which covered the bit of copper wire linking your home to the local exchange.

But, um, crucially, friaco didn't compel BT to offer an unmetered package between the local and regional exchanges. Somewhere in the Oftel ruling there was a vague suggestion that it would be a nice idea if BT was 'so minded' to offer a full unmetered package. BT, it turned out, was not so minded in any way, shape or form to share its toys with the other children.

Maybe BT asked: why should it make things easy for the competition? It could offer its own unmetered package and steal a lead. And, lets face it, with the former monopoly on the ropes and serious doubts hanging over the future of its chief executive, Sir Peter Bonfield, BT needs to be as obstinate as possible at the moment.

But it has meant that all the ISPs salivating at offering unmetered packages soon realised they couldn't sustain the business model and had to pull them. Now the industry is in turmoil.

This wouldn't have happened in France and it wouldn't have happened in Germany. The UK internet sector is now in serious danger of losing the e-business race, thanks to BT's intransigence and Oftel's woolly ruling. BT has quietly started offering a proper friaco package to US telecom giant Worldcom, although the suggestion in the industry is that, bizarrely, Worldcom still doesn't know how much this is going to cost.

So much for business at internet speed.