Years after its founding, Phorm is still burning through money like a junior dot.com, and now the Guardian reports that the unloved UK startup has been dropped by its biggest potential customer BT.

It leaves the company deep in the red, unloved for technology that anyone who has heard of it (Phorm's Webwise) almost certainly believes to be a snooping system with nothing to offer a sane Internet user.

Phorm's two other big signings are now reluctant, Virgin because like BT is doesn't fancy the bad publicity, and TalkTalk because it doesn't fancy being left as the only name pushing a system that is a pain to explain.

But is the whole controversy Phorm's fault? I'd argue that almost none of it is.

The problem is that the UK's large ISPs are by and large a useless bunch with no vision, little notion of what the customer wants, and even less idea of consumer rights. It's not Phorm that is wrong, it's the business model of the ISPs it wants to buy its system, which is how the trouble started.

Whatever you think of Phorm's Webwise, nobody compelled BT to get involved with Phorm in the first place, and the naive and underhand nature of the controversial 2006 trial that generated so much bad publicity is entirely BT's responsibility.

The ire was directed mostly at Phorm for inventing a system that ISPs would dearly love to implement if they could get away with it, but it was BT that conducted the trial in the way it did.

What was BT thinking of? Leave aside the data protection and moral consent issues, Phorm is an undeveloped concept. The central flaw is the idea that people will pay £15 a month in subscription to an ISP to watch ads at all. They won't. Why would they? Nobody asks people to pay to watch ads on TV in the form of a bill.

The only way Phorm will fly is if BT (or any other ISP) deigns to give away 1-2mbps Internet access for free, in which case having usage tracked in an intrusive way might be worth it for the hard up. People reveal astonishing things about themselves without a bye or leave if they convince themselves it's worth it  - take a visit to Facebook if you doubt me.

But they can't fit that into their conservative ‘let's scrape pennies from the buggers' mentality; this company is a telco after all whatever gloss you put on their supposed reinvention.

Use Phorm by all means, but get consent and give the people willing to sign up to it a reason to do so called FREE INTERNET ACCESS.