BT's landmark broadband price cut is being welcomed by the British government, AOL and Freeserve.
The rival ISPs say the new wholesale tariff should help ensure high-speed access becomes a mass market phenomenon.
BT will cut its monthly ADSL charges to competitors from £25 sterling to £14.75 from April.
Britain’s E-commerce and Competitiveness minister Mr Douglas Alexander says the move is "excellent news for consumers and business".
He says: "Five months ago, I challenged BT to lower broadband prices. Ben Verwaayen (BT's chief executive) has now taken up this challenge. Provided BT's wholesale prices remain fair, today's announcement is excellent news for consumers and business."
Freeserve chief executive Mr John Pluthero says the new tariff will enable it to pass on savings to consumers.
He says Freeserve is currently working on a new price structure, but indicates that it now has enough leeway to offer an attractive package for consumers.
AOL UK’s chief executive Ms Karen Thomson says: "This is a very positive announcement, which we welcome. We are presently examining the details, but it's already clear that this takes us much closer to the dawn of broadband Britain."
BT has previously come under fire for the amount it charges providers for access to its broadband network.
High prices have been blamed from the slow take-up of the service among consumers to date.
PA