Entanet is calling on Ofcom to clamp down on rivals that are persuading customers to take up both their data and voice services without warning them that switching to another supplier later could prove to be expensive.

LLU* (Local Loop Unbundling) ISPs present the customer with a very attractive cost if they take up the option of subscribing to Internet and voice services using their own network based on LLU. Customers however are not told that, because the service is on the service provider’s own network, if they wish to transfer their service to an alternative supplier later it is likely to cost them as much as £150 or more.

This cost in incurred because, once customers have been disconnected from the BT Wholesale IPStream network – this must be done so that they can be connected to a different network – service providers must pay a fee to re-connect them. Entanet has received a number of complaints from companies and individuals who have been moved onto an unbundled loop without their knowledge or approval.

Entanet’s Broadband Business Development Manager, Carol Davies, says: “Several of the LLU providers are moving existing customers over from their IPStream platform to LLU without the customers’ knowledge. It’s only when the customers are contacting us with the intention of migrating that they find they’re currently on LLU. This means that it will cost them to move, hence taking away their freedom of choice.

It makes sense for these service providers to move existing customers over to their own network once they have enough penetration on a particular exchange” she notes. “Because under LLU they have paid to set up their own network independent of BT’s, they have a lower cost base for customers that they connect to their own network, hence generating more income for them.

We can fully understand why the LLU providers offer customers attractive deals but they do not appear to be making it clear to both new and existing customers that they will incur a significant cost if they choose to switch back to their former or an alternative supplier at a later date”, says Davies. “It’s our view that Ofcom should be insisting that they make this absolutely clear. At the moment, customers are being led down the garden path.”

Ofcom has set up an Industry Migrations Programme Board, of which Entanet is an active participant, but this has so far not reached any conclusions about what should be done about the problems caused by LLU. However, decisive action is needed soon to prevent the problem growing. Entanet estimates that some 200,000 customers have already signed up for single-supplier contracts and will now find it expensive to make a change. “Ofcom’s job is to ensure fair play for the consumer and encourage competition, but in our view the current rules leave the consumer far too open to exploitation and make effective competition extremely difficult. It’s time that Ofcom insisted that the LLU providers ensure that both existing and new customers are fully informed of the implications when they move/sign up for their services.”