UK ISPs Adopt a Single All-Inclusive Price for Broadband and Line Rental

The United Kingdom’s Advertising Standards Authority will today begin enforcing a new guideline that requires Internet Service Providers (ISP) to adopt clearer advertising of their products by, for example, combining the cost of line rental (phone) into their monthly broadband prices.

The new measures were officially announced earlier this year (here) and are being introduced in order to combat the often misleading and confusing service promotions that some ISPs tend to run (e.g. hiding the cost of line rental in the small print). Overall there are three key changes, which we’ve summarised below.

The ASA’s Recommendations form Broadband Adverts

* Show all-inclusive up-front and monthly costs; no more separating out line rental

* Give greater prominence to the contract length and any post-discount pricing.

* Give greater prominence to up-front costs (such as delivery fee, activation fee, installation fee).

Most of the major ISPs, such as TalkTalk, Hyperoptic, Post Office, BT, Sky Broadband and Vodafone (others are making the change today), have already adopted the new single pricing approach and thus they now include the cost of line rental into their monthly fee.

The move should also help to end confusion over post-discount prices, where some providers had a nasty habit of hiding their post-discount prices inside reams of confusing small print. On the other hand BT and TalkTalk still conceal their post-contract pricing in the small print, which may cause some confusion, but the ASA’s rules don’t cover post-contract pricing because “these are costs that consumers can choose to avoid” (i.e. such as by switching ISP, even though only about 10% a year actually do that).

Guy Parker, ASA Chief Executive, said:

“Broadband is a service we all take for granted. That’s why some people can get frustrated when they sign-up to a package after seeing an ad, only to find their bills are higher than expected.

Our research found people are likely to be confused and misled by the fixed broadband price claims in ads they see and we’ve responded by tightening our approach. From today, we expect to see a change in how broadband providers advertise their prices. The effect should be a real positive difference in how consumers understand and engage with ads for broadband services.”

However the change does NOT apply to providers that only sell a separate broadband connection (i.e. some ISPs sell a broadband connection over Openreach’s [BT] network and you then take line rental from a different provider).

On the other hand the ASA has also said that smaller ISPs which offer both broadband and line rental, albeit as two entirely separate / optional products (not bundled), will still be required to follow the new policy.

An ASA Spokesperson told ISPreview.co.uk:

“Consolidation is only recommended where both broadband and line rental are offered by the provider. Providers who offer their own line rental, but allow customers to use an alternative provider will be expected to consolidate the two prices.

If they wish, they could include a qualification to make clear that, should a consumer wish to use an alternative provider for their line rental, the cost of broadband alone would be £x. We have clearly communicated this point to relevant stakeholders, including ISPA.”

It’s likely that the ASA made this particular change in order to plug a possible loophole in their rules, but equally it will give many providers an annoying headache and could cause some confusion for consumers. The ASA has asked ISP’s with questions about the new approach to contact their CAP Copy Advice team (here).

We should point out that our own UK ISP Listings (Comparisons) system was updated to reflect the new single pricing structure many months ago and we also offer a separate ‘Optional Broadband‘ category for showing ISPs that allow you to optionally take line rental (phone) from another provider (usually only applicable on Openreach’s network).

Tomorrow’s move should also make it easier for Openreach to introduce their new Single Order Generic Ethernet Access (SOGEA) product in the future, which aims to offer a truly standalone FTTC (VDSL) “fibre broadband” service without any voice / phone component (details here, here and here); this isn’t expected to launch (commercially) until 2018.

We fully expect that some ISPs may also use the move to mask small price rises and, with so many changes occurring over a short space of time, we won’t be able to cover everything, although we have already written about the big ISP changes. In keeping with that we will also shortly begin a full update sweep of our database in order to check which ISPs have adopted the change.

James Blessing, ISPA Chair, said:

“ISPs are committed to making it easier for consumers to understand the advertising of broadband, including to moving to all in pricing. We would encourage consumers to use the wide range of resources and tools designed to help support customers make an informed choice, including comparison sites and specialist news sites.

Consumers also have a number of protections available, including the ability to switch providers easily and a broadband speeds code of practice to give accurate information on broadband speeds at the point of sale.

Our members are continually innovating in their products, offering consumers a wide choice of services using a variety of technologies. We look forward to working with our members and the ASA in this area.”

Elsewhere we can confirm that Virgin Media, Plusnet and others will be adopting the change today, although this shouldn’t produce any major adjustments to their current pricing, beyond merging the existing line rental and broadband charges. But keep an eye open because some ISPs are slipping some small price increases into the change, a few of which we covered last week.