Here in NZ we have a similar, but significantly different issue.
We have an incumbent bandwidth provider with a Govt-sanctioned monopoly. Add in overseas shareholders & the focus for the last 10 years has been on profit over investment. We have pathetic internet connections - average users are on plain ADSL, with a real downstream speed of 2-3Mbs. Recently they had to cancel a connection plan as they had oversubscribed it so badly that they were hardly able to provide speeds faster than dialup.
Recently, to "reduce costs" the telco pulled peering with the major IPXs in NZ, and now charge boatloads for ISPs to buy an ATM connection back to their network. Yes, ATM.
It all boils down to a lack of investment to maximise profits. ISPs in NZ & the UK have been underinvesting and oversubscribing to make the most of what they have. When they finally wake up & realise that they can't provide the service they said they can, they panic & start looking elsewhere to get the money they need to pay for the upgrades they should've done/started years ago.
In NZ, the money is coming from other ISPs, Govt & raping the customer. In the UK, ISPs want it from large content providers.