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Government Tells Big UK ISPs to Promote Social Broadband Tariffs UPDATE4

Monday, April 4th, 2022 (8:18 am) - Score 4,632
Hands holding british pound coin and small money pouch

The Government’s Culture Secretary, Nadine Dorries, has increased the pressure on big UK ISPs by calling on them to put more effort into promoting the existence of cheaper “social tariffs” for home broadband, which are usually offered to those who may be unemployed or on certain benefits.

A number of broadband ISPs currently offer low cost social tariffs, including BT (Home Essentials), Virgin Media (Essential Broadband), Hyperoptic (Fair Fibre Plans), KCOM (Flex) and G.Network (Essential Fibre). But Ofcom recently revealed (here) that – out of an estimated 4.2 million households in receipt of Universal Credit – just 55,000 homes have taken such a package (1.2% of those eligible).

NOTE: The regulator states that a standard commercial broadband package costs an unemployed person claiming Universal Credit an average of £27 per month – 8.3% of their monthly disposable income. A £15 social tariff would almost halve their broadband costs and use up 4.6% of disposable income.

According to Ofcom’s latest Affordability Report, some 1.1 million households (5% of the UK) are “struggling to afford their home broadband service” and so could stand to benefit from such tariffs, but customers are often left in the dark.

One of the biggest and most well-known challenges on this front has been the sheer lack of consumer awareness around the existence of such tariffs (Ofcom found that 84% of benefits recipients are unaware that social tariffs even exist). Broadband ISPs, perhaps understandably, tend not to openly promote these plans alongside their main products and instead hide their social tariffs away on separate pages, which require more effort to uncover.

The regulator recently urged providers to tackle this by making such tariffs “more prominent” on their websites and promoting them alongside “any communications … about price rises“, while also making it easier for such consumers to sign-up. Nadine Dorries has now reinforced this message in a new letter to the bosses of BT, Virgin Media (VMO2), KCOM and others.

The culture secretary added that she wanted the associated broadband ISPs to, among other things, clearly outline their plans for drawing more attention to any concessions and to provide their estimates of take-up over the coming 12 months (answering that last one with any accuracy will be very difficult).

Nadine Dorries MP, Culture Secretary (DCMS), said:

“The Government is determined to work with businesses to keep everyday costs down for families across the country. Broadband has transformed people’s lives as we become a more digital society and I believe it’s vital we raise awareness of discount broadband offers for low-income households.

It is more important than ever that we support families and ease pressures on household finances while also closing the digital divide. I am grateful for the work you have done on this so far and look forward to your response on how we go further.”

Ofcom has maintained the threat of mandatory regulated social tariffs if ISPs fail to adapt, although it naturally makes more sense to focus on the underlying challenge of awareness before we get into the tedious question of enforced tariffs for all ISPs. Smaller providers, especially those deploying new FTTP networks at great cost, are likely to struggle with the latter.

Admittedly, in the grander scheme of things, broadband connectivity is only a small slice of household expenditure compared with the now much more significant costs and prices rises being seen across food, fuel (petrol, diesel) and energy (electric, gas) etc.

The Government itself could perhaps also do more, such as my highlighting the existence of such tariffs in their communications to those on benefits.

UPDATE 10:09am

We’ve had a comment from BT, which interestingly doesn’t acknowledge their own need to increase awareness.

A BT Spokesperson said:

“Our industry leading at-cost social tariff, Home Essentials, makes access to fast, reliable broadband more affordable for those who need it the most, including the estimated 4.6 million households who receive universal credit. It’s available online, over the phone and on the high street.

As an economic squeeze takes hold, it is now urgent that the rest of the industry plays their part to introduce this sort of social tariff, and that Government looks at what more they can do to offer further support for those who continue to struggle.”

UPDATE 11:21am

Hyperoptic has sent in a comment.

Charles Davies, MD ISP, Hyperoptic:

“We support the government in challenging all providers to proactively increase awareness of social tariffs, so that our industry can play an active role in mitigating the cost-of-living crisis. We actively promote our ‘fair fibre’ tariffs via direct marketing and engaging our partners in the social housing sector.

In addition to this tariff, Hyperoptic also offers an Affordable Product Scheme to social housing clients, where Hyperoptic funds a free 50Mb connection for 12 months for 10% of their portfolio. This goes beyond an affordable tariff to reach those who might not be online at all. It is entirely up to the social housing provider to decide who the product is offered to, and there are no financial or preliminary checks required.”

UPDATE 5th April 2022

Added some more comments.

A Virgin Media O2 spokesperson said:

“As one of the first providers in the UK to launch an affordable broadband plan for those facing financial difficulty, we’re committed to ensuring there is awareness of our Essential Broadband product. We’re currently speaking to Government on these plans and on ways to make sign-up easier and quicker, moving from a manual to an automated process with regards to identifying individuals or families receiving Universal Credit. We will continue to build on the range of support measures we already have in place and encourage other operators to join us in doing the same.”

Tony Hughes, CEO of 4th Utility, said:

“Digital inclusivity is hugely important in helping to reduce the digital divide across the nation. More focus needs to be applied in this area as the heightened cost of living pressures we’re currently facing take effect. We agree that there should be better information across the board on more affordable social tariffs, and they must be easy to access for those subscribing to the service.

4th Utility (FTTP) offer the flexibility of 30-day rolling contracts and do not require credit checks for customers to connect to and use the internet. Working closely with developers, local authorities and partners, 4th Utility aim to provide a social housing offering that helps support communities in the way they need it.”

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
32 Responses
  1. Disgruntled of Dankshire says:

    How about government telling isp’s to reduce charge for those onmot superfast ( <30Mbs) broadband

    1. Mark Jackson says:

      I assume you meant to say, “how about the government telling ISP’s to reduce the price for those on slower speeds than 30Mbps”?

      There are a few challenges with that. Firstly, some people will have chosen a slower tier by choice because they only have basic requirements. Secondly, in copper line-only areas, the cost of supporting older connection technologies can be significantly higher, so you’d be asking ISPs to lose money (not an ideal economic model).

      On top of that, Ofcom’s regulation now allows Openreach to help pay for the costs of their FTTP build by effectively raising prices on some of their older products. But if you change that, then it may serve to reduce the rollout plan for full fibre. These are just some examples of the challenges with what you suggest.

    2. Disgruntled of Dankshire says:

      @ Mark Well actually the slow speed enjoyed by me and others was due to the rollout funded by BDUK AFAIK where the line length was not taken into consideration during the planning stage. I assume OR would have informed BDUK, but it would appear it was ignored. OR know the speeds as they monitor the lines regularly, so perhaps they could reduce the line charge.
      I am sure there are people on benefits paying the same price for sub superfast broadband, effectively subsiding those who can get superfast, ie > 30Mbs to the next band point, typically 38Mbs.

  2. Optimist says:

    With inflation rocketing, many people will simply be forced give up broadband completely. A way for ISPs to protect their revenues will be to make these cheaper but more basic packages available to all

    1. Mark Jackson says:

      Most people who aren’t on benefits will find that, if push comes to shuv, there are cheaper alternatives or options to be found in the competitive market – albeit usually with some sacrifice (e.g. speed, connectivity methods, quality etc.). For example, Three’s 4G Home Broadband package or using your regular mobile data plan for broadband. So I don’t think people will, on mass, be giving up broadband completely.

      Remember, broadband is a relatively small piece of most household expenditure, so there are bigger and more difficult decisions to be made ahead of that (e.g. food, gas, electricity, car usage, home maintenance etc.).

    2. James says:

      there are cheaper alternatives or options to be found in the competitive market

      Unless of course you live in Hull where this isn’t the case!

  3. Regorimabitbackward says:

    My question is who will pay for an isp to provide these much needed “social tariffs” I cannot imagine any isp wanting to cover any potential profit loss, so does this mean a price increase for others using their service, or the government shaking the money tree again.

    1. Mark Jackson says:

      At present the take-up is so low that they’re unlikely to cause price rises elsewhere, but that may change as adoption rises. The providers that offer such tariffs usually do it at what looks, very roughly, like an at cost price.

    2. WibbledOff says:

      It means people that are hard working, but are struggling to pay their bills will be paying for these social tariffs.

      Like all the benefits in this country, they are all wrong. It should be if you pay into the system you get benefits, but if you don’t then you don’t get anything.

    3. CarlT says:

      @WibbledOff

      ‘It means people that are hard working, but are struggling to pay their bills will be paying for these social tariffs.’

      40% of Universal Credit recipients are in work.

      Depending on how you measure it 40%+ of working household don’t pay into the system on a net basis – they receive more from the state in services and welfare than they pay in.

      That’s a lot of people to decline public assistance to.

      Your household does have an income of more than £40k a year, with zero kids, right?

    4. Mike says:

      It’s only normal for the hard working to be robbed to pay for those who can’t (be bothered).

    5. WibbledOff says:

      @CarlT 40% says the likes of the BBC, but official figures show a different story of around an average of less than 20% depending on the area of the country (highest being around 36%).

      I’ve worked hard in my life and done what is necessary to make sure my kids didn’t go without and have a good education. I don’t see why I should pay for those that can’t be bothered.

  4. Martin says:

    I wonder how the government would feel if CSPs started running campaigns for government to cut fixed taxes to help poorer people.

    How about road tax charges, TV licence fees, VAT and even council tax! All difficult to administer would be the reply!

  5. libertarian says:

    Govt should cut taxes rather than force private companies to lower their costs

    1. CarlT says:

      I used to be a full on libertarian. Then I grew up and grew a soul.

      Indeed, we should follow that well known socialist country the United States in this regard.

      Oh, wait, they have extensive social broadband access.

    2. Mike says:

      @CarlT

      That must have been a few centuries ago, you’ve always been a socialist here.

    3. Libertarian says:

      Socialists always present false statements while pretending to act superior yet they never move away to actual socialist bleephole countries

  6. t4n0n says:

    Oh fantastic, a government price cap on broadband now – because the one on energy worked so well…

    /S

    1. t4n0n says:

      Nothing says “fixed the problem” like a catastrophic failure the moment it’s phased out.

      If a total collapse of the energy supply market, 40+ companies going bust in mere months and 5m customers being displaced is a sign of success, then only God knows what you’d consider a failure.

  7. Blip200 says:

    At the same time helpful … but meaningless. Broadband is not expensive for almost any household relative to electricity/gas/food.

  8. Mark says:

    Government’s Culture Secretary, Nadine Dorries, has increased the pressure on big UK ISPs by calling on them to put more effort into promoting the existence of cheaper “social tariffs” for mobile broadband 4G or 5G as well.

  9. Pete J says:

    Great idea if it was truly a social tariff especially for older people who don’t need more than 30mb. There are lots of packages that are cheaper than the social tariff.
    From my experience of dealing with persons on benefits (Ex-DWP) they are not interested in a cheaper social tariff. They want and pay for the most expensive full fibre broadband with movies, sports and TV. I’ve seen their bills for a package around £150 a month minimum in a lot of cases.
    Most households do not need more than 50mb a month. 100mb at a push. FTTP is good but who really needs 1GB. Nobody and not at present.
    Once AV1 compression becomes standard high speed broadband will not be needed.

    1. Mark says:

      Very odd for ex DWP accepted people’s who has seen their bills for a package around £150 a month minimum in a lot of cases.

  10. William harper says:

    Why is it that sky is not promoting the the £17.99 isp for people on universal credit

  11. GuruMediator says:

    Surely this is signalling that the benefits just aren’t enough? What next? Asking Tesco to knock 20% off if you flash your Job Seekers card?

    Raise benefits, then people won’t have to feel like they are drowning under the cost of utilities.

  12. Grumpy Girl says:

    @ Peter J

    Great idea if it was truly a social tariff especially for older people who don’t need more than 30mb.
    Most households do not need more than 50mb a month. 100mb at a push.
    FTTP is good but who really needs 1GB. Nobody and not at present.

    Really, well I am a (retired, old in body but not in mind) cartographer, programmer and data analyst, still doing programming in java, python, sql,
    system and database administration.

    I have a slow (and in my opinion expensive) connection. Map downloads take ages, netflix is a nono, 100mb, yaffle that in a day.
    FTTP is a dream, if and when it arrives, which I doubt, 100Mbs would do me.
    Of course I don’t think your post is ageist, just misguided, but bear in mind us oldies have lots of experience and carry on with our craft to keep our little grey cells active.

    1. Nop says:

      Check if you’re in a 5G area, FTTP missed my neighbourhood but by chance I am in a 5G area and I get about 350Mb/80Mb consistently from Three.

  13. james smith says:

    instead of telling companies how to manage their house how about bo jo reclaims money lost to fraud!!! It is reputed that a lot of covid assistance was lost to fraud. Welfare can’t be set to high or it puts people of looking for jobs. If people shop after about 2 or 3pm fridge items have a decent chance of being reduced

  14. Peter says:

    Nadine Dorris and culture are not a good fit.
    All this fttp and broadband should have been rolled out many years ago… it’s all waffle and offloading central governments shambolic infrastructure record.

  15. Roger_Gooner says:

    Virgin Media is an example of what the government and OFCOM are complaining about. On the broadband only deals web page VM’s 10 deals are prominently displayed in the upper third of the page but you have to keep scrolling past the halfway point to find out about Essential broadband for those on Universal Credit. It’s 15Mbps download/2Mbps upload on a 30-day rolling contract for £15, no TV or landline.

  16. james smith says:

    or how about people get jobs or qualifications and training so that they can pay their own way, might be a novel experience for some of them

  17. Grimreaper says:

    40% of UC claimants are in work – fancy having to top up the wages of so many working people with benefits funded by tax payers just so that they can exist, some of whom are not much better off than those claimants, its almost something that a third world Country would be doing. A better solution would be to charge a huge annual tax to those businesses with massive profits who choose to pay a large percentage of their staff low wages, meaning that the employer has to offset the cost of the benefits their employees are forced to claim – not other tax payers.

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