Government Tells Big UK ISPs to Promote Social Broadband Tariffs UPDATE4

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).

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.”