Altavista UK is blaming British Telecom for its decision to can unmetered internet access.
The company claims BT failed to provide sufficient lines making the roll out of the service impossible.
The service was supposed to have gone live in June, but Altavista now admits its flat rate offering was never made available to a single user.
Altavista's decision will disappoint more than a quarter of a million expectant surfers who signed up for the service.
The company said BT had given misleading promises, initially assuring the US portal that flat-rate circuits would be made available by September. But BT then put the date back to January.
Altavista says it will be making its feelings known to Oftel next week and is advising the 270,000 who signed up for its service to opt for an alternative unmetered offering from the likes of Freeserve, which restricts flat rate access to off-peak periods.
Freeserve, however, is warning the industry that its unmetered service has already jammed up because of excess demand.