Cuckoo Boss Calls on UK ISPs to Scrap Exit Fees and Price Hikes

The CEO of broadband ISP Cuckoo, Alex Fitzgerald, has today called – perhaps in vain – on all rival UK internet service providers to “abolish shady exit fees and above-inflation price rises” to help alleviate the pressures of the ongoing cost-of-living crisis.

Over the past couple of months, we’ve seen almost all of the major broadband ISPs announce huge annual price hikes (summary), many of which have reached the 9-10% level for the first time – well above even the current position of surging CPI inflation and roughly double what we’d normally expect.

However, Cuckoo claims that, unlike the energy sector, where wholesale prices have dramatically increased, “wholesale costs in broadband are regulated by Ofcom and have remained flat for two decades.” But this does vary between different products (some have gone up in price) and network platforms. Lest we forget that 20 years ago most of today’s broadband products didn’t even exist.

In addition, the wholesale rental is only one part of the cost that an ISP has to consider when building their packages (e.g. support, capacity, service features, CPE routers, electricity etc.), so it’s never as simple as just one aspect.

Alex said:

“Millions of people in the UK are facing the worst cost of living crisis for decades. Broadband providers must do the decent thing – scrap the exit fees and axe above-inflation increases.

Most broadband customers are tied into long contracts. Many won’t have read the small print properly and won’t realise they face an annual increase tied to the Consumer Prices Index with another 4% whacked on top.

Then when they do realise and try to leave for a better deal, they run into the brick wall of exit fees. These can be hundreds of pounds. Broadband firms use opaque methods to calculate the fees – meaning customers aren’t sure of how much they could have to fork out.

It’s the rises combined with the exit fees trap that is so unfair. It’s going to hurt the poorest the worst but others will be affected. It will hurt those who are just about managing and it will hurt those on middle incomes.

At Cuckoo, we can’t say we’ll never raise prices, but we will always be honest and transparent – and we will never tie people into opaque contracts with extortionate exit fees.”

We should point out that “exit fees” – often reflected as Early Termination Charges (ETC) –  usually only apply to those who try to switch ISP when still within their existing contract term, but there are exceptions. In addition, many smaller ISPs are keeping their prices static and some have pledged not to raise prices (e.g. Giganet (here), FibreNest (here), KCOM (here), Fibrus (here), Wildanet (here) and Gigaclear (here)).

Naturally, Cuckoo’s comments are designed to highlight the fact that they have no exit fees and will not be raising prices, at least not this year.