Your contract is with the ISP. They buy part of your service from BT (some of the the equipment in the exchange could be theirs or BT's, but the 'last mile', the copper and/or aluminium to your house, is BT's).
The ISP in my experience is reluctant to pass the job to BT because they incur a cost if there's no fault found on the BT circuit or equipment - they want to make sure the fault is not elsewhere (which it often is - if they passed all the calls over straight off, they'd get charged for all the problems with customers' routers etc.). So they will have you going through all the hoops of unplugging all your phones, using the master socket, etc. You can now tell them that you have another router that won't sync either so that should move things along a bit faster.
Call them and tell them it doesn't work. Stay with it, painful as it is.
Are you far from the exchange? I have a poor line and speed anyway, and my ISP (Virgin) tried to tell me at one point that the line length was the problem and they couldn't provide a service and they would cancel the contract! However if you have had decent speeds before this shouldn't arise.
You aren't beaten until you give in - so don't!
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