UPDATE ISP PlusNet Tackles Broadband Price Confusion on Low Cost Areas

Budget Internet provider PlusNet must correct their definition for “Low Cost” areas, which directly impacts the price that subscribers pay, after ISPreview.co.uk readers noted that the details on their website appeared to have been out of date since 26th June 2014 when Ofcom changed the regulation.

At present PlusNet’s customers pay less for the service if they live in a so called “Low Cost” area, which is explained in more detail on their Guide to Low Cost Areas page and defined as being reflective of Ofcom’s telecoms Market 2 and Market 3 definitions. By comparison customers considered to be in Market 1 pay a higher price (we’ll explain why in a moment).

Put another way, the standard price of PlusNet’s Unlimited Broadband package is £9.99 per month in a Low Cost area (excluding line rental as this price remains the same regardless of market definition), but this rises sharply to £17.49 if you’re stuck in a part of the UK defined by Ofcom as Market 1.

In simple terms, Market 2 and 3 account for the vast majority of the UK where there is plenty of competition between ISPs and thus regulation is soft, which is a combination that results in lower prices. By comparison Market 1 accounts for the final 11.7% of UK premises (i.e. mostly rural areas and or locations where only a single primary provider exists) and thus suffers from less competition and more regulation, which means higher prices (note: it might arguably be even more expensive if Ofcom didn’t regulate).

The Change in Market Definition

The above definitions have been around for a fair few years and in that time rival’s to the incumbent BT throne, such as TalkTalk and Sky Broadband, have expanded the coverage of their own non-BT unbundled (LLU) phone and broadband networks. Ofcom’s recent review of the UK’s Wholesale Broadband Access (WBA) markets (final statement) took account of this and other changes to produce a new definition, which the regulator told us came into effect during late June 2014.

Without getting too technical, under the new definition Market 2 and 3 effectively became known as Market B (accounting for 89.7% of UK premises) and the more expensive and tightly regulated Market 1 became known as Market A. The key difference here is that the new Market A now accounts for 9.6% of UK premises, which is less than the 11.7% under Market 1 (i.e. more premises were classified as being in a “Low Cost” area).

In other words PlusNet has spent more than half a year expressing the old market definitions and thus giving customers confusing or completely incorrect information on their website about how much they should pay. A particular fear exists that some of those originally defined as being in Market 1, but which may now have been moved into Market B (cheaper areas), could currently be paying well over the odds for their broadband.

The good news is that this problem should only impact a fairly small number of the ISPs customers and it’s hoped that PlusNet’s internal systems may have taken account of the change, even if their website has failed to reflect the correct information (at the time of writing it’s still reflecting Ofcom’s old definition).

We raised this problem with PlusNet on Thursday last week and happily they promptly responded to say that the issue was being investigated. A more detailed response has been promised after the investigation has concluded and we will update this article once that arrives. In the meantime any customers defined by PlusNet’s system as being outside of a ‘Low Cost’ area might wish to double check with the ISP in case they’re now in the wrong market definition (especially if you’re out of contract).

UPDATE 17th Feb 2015

Luckily it looks like PlusNet’s existing customers have been given the correct prices when they order, although the ISP has promised to update their website in order to reflect the correct information.

A Plusnet Spokesperson said:

“Thank you for bringing this to our attention. ISP Review are correct that we have not yet updated the webpage that describes the Ofcom wholesale broadband access definitions. We’re really sorry about not updating this detail. Our online team are now working to get this fixed as soon as possible.

However, we can confirm that our Price Guide does contain the correct pricing regarding Market A and Market B and our Line Speed/postcode checker includes the updated Ofcom definitions to identify customers as either Market A or Market B.”