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UK Broadband ISP TalkTalk Controversially Raises Phone Line Charge by 55p

Posted: 10th Aug, 2010 By: MarkJ
talktalk uk broadband and phone ispBroadband and phone provider TalkTalk UK is facing fresh criticism today after revealing that its monthly line rental fee will change from £11.49 to £12.04 (+55pence) per month from 1st October 2010. The move is controversial because, according to TalkTalk's own figures, such a rise could cause "over 100,000 mostly low income homes" to give up their broadband lines.

The price rise is being seen as a direct response to recent moves by BT Retail, which announced last month that the price of UK landline rental would increase by 50p (pence) a month from October 2010 (here). BT also raised its call charges by an extra 10% and the cost of connecting a call was hiked from 9.9p to 10.9p.

However BT's move was designed to push customers on to its longer term contracts where they would pay considerably less for the same service. By contrast TalkTalk's line rental rise, which is just one of several price changes, appears to be a blanket adjustment. But that's only part of the story.
TalkTalk Price Changes (1st October 2010)

Our standard international rates will be increasing - you can view the new rates here (PDF). Please note that if you have calls to selected international countries included in your package, they will not be affected.

If you pay for TalkTalk line rental it will change from £11.49 to £12.04 per month.

If your monthly payment to TalkTalk fails, the one-off charge that's applied to your account will be £10.00, in line with BT.

If you move house the one-off fee you pay for us to move your service will be £49.99.

If you subscribe to our Mobile Extra service your monthly fee will change from £0.45 to £1.46, in line with BT's equivalent service. [Please note that Mobile Extra is not relevant to TalkTalk Essentials or TalkTalk Plus].

The cost of an 01, 02, 03, 0870 and 0845 daytime call is changing to 6.4p per minute. Please remember, this change doesn't affect any inclusive calls (e.g. to 01, 02, 03 numbers, of 60 minutes or less) that are included in your package.

Chargeable calls that currently incur a 9.9p call connection charge will instead incur a charge of 10.9p. This change doesn't affect any inclusive calls (e.g. to 01, 02, 03 numbers, of 60 minutes or less) that are included in your package.
Customers are being notified about the changes as part of their August bills, although some have been quick to point towards TalkTalk's past stance. Indeed the operator spent the best part of 2009, and early 2010, in bitter opposition to the previous Labour government's proposed 50p +vat per month tax on all fixed UK telephone lines.

The tax (levy) itself was originally designed to make up the bulk of Labour's planned Next Generation Fund (NGF). This would rake in approximately £175m per year that could then be spent on bringing "super-fast" Next Generation Access (NGA) broadband services to 70% of the UK population by 2017.

A TalkTalk Spokesperson told ISPreview in our December 2009 ISP interview (original article):

"This is an unjust and regressive tax on all phone customers which will subsidise mostly richer rural households that can afford high priced super fast broadband services.

As well as being unfair we estimate that the increase in price will mean that over 100,000 mostly low income homes will be forced to give up their broadband lines. This is wholly inconsistent with the Government's plans to tackle digital exclusion by increasing uptake and use of broadband.

Crucially the scheme is likely to delay next generation broadband roll-out in rural areas rather than hasten it as private investors will wait for public funds to be made available. This will mean that much of the tax will be wasted investing in networks that the private sector would have built themselves anyway.

We understand that this levy was devised at the last minute after the Treasury refused to make funds available, presumably because they thought it was a bad use of public money."

Avid readers will know that this unpopular tax was eventually scrapped after May's general election and the introduction of a new coalition government, which ironically sighted TalkTalk's study as part of its reason for doing so. It was replaced by a plan to use part of the BBC's TV Licence fee (3.5% Digital Switchover Budget), from 2012 onwards, to help deploy broadband around the UK.

The obvious conflict with their earlier position appears not to have phased TalkTalk. The ISP also remains a supporter of Race Online 2012's ambitious plan to get everybody in the country online.
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