In reply to a post by Malwaremike:

Surely it's Ofcom we have to thank for this? I think it was early last year that Ofcom agreed with ISPs for annual increase of February CPI+3.9%. With years of low interest and CPI rates this was OK but anyone with any sense could see the bubble forming even without the antics of certain politicians. It was no surprise when inflation rose to 10% and the ISPs gleefully imposed the hefty price increases they were granted by Ofcom.

Yes, it was an arrangement that OfCom seems to have been conned into, I guess they thought nobody would worry much about a 4 or 5% increase. It's laughable that .gov have told people they shouldn't expect wage rises inline with inflation, yet a regulatory body set up by .gov thinks it ok for prices to go up way above inflation.

In reply to a post by candlerb:

In reply to a post by burble:

AFAIK, 3.9% of increase is being allowed for all ISP's to cover capital expenditure on infrastructure

Who is it being "allowed" by? Does anything stop them putting CPI+50% in their contracts if they wanted to? ...

In reply to a post by Malwaremike:

Surely it's Ofcom we have to thank for this? I think it was early last year that Ofcom agreed with ISPs for annual increase of February CPI+3.9%. ...

@candlerb asks where the C/RPI + 3.9% formula comes from. I'm interested too. @Malwaremike asserts it's Ofcom, but doesn't give any reference - could one be provided? I've had a good hunt but can't find anything. The Ofcom pricing trends review of Dec 22 makes no reference to any Ofcom rule. On the contrary, the introduction to section 3 states that "Ofcom does not regulate retail prices". Section 2 implies that it was the CPs that came up with the 'inflation + x%' formulae, and that the x is chosen by each provider (so what a strange coincidence that they all came up with 3.9% or thereabouts). Best I could find is this from Daniel Barnett, who is apparently a barrister (I don't listen to LBC) who says increases are 'capped at inflation + 3.9%', but again doesn't give a reference.

So while the hikes may be limited by some legislation or other, I suspect we can't blame Ofcom for this one. Can anyone clarify?

I started a thread on this almost a year ago so nobody can say it comes as a surprise.

Indeed Ofcom agreed to the principle of CPI+extra% as far back as 2013, see here if you want to plough through it.

Sorry don't have ref to the 3.9% figure but it was being punted from early last year if not before. Ofcom keeps as tight a hold on ISPs as Ofwat does on the water/sewage industry

Lifted straight off of this page https://www.ofcom.org.uk/news-centre/2023/review-of-...

If the increase uses an inflation index such as CPI or RPI, then providers should use the most recent figure. An example of wording setting out a price rise could say: In April each year, your price will increase by an amount equal to the CPI rate published in January of that year, plus 3.9%.

But that's nothing more than an example! It doesn't say that providers can't use a lower or higher value than 3.9%, any more than it says that providers *must* include an annual increase at all, nor whether such an increase should be linked to CPI or RPI.

Well I'm just having a rest from trawling t'internet, I've found several referances on OfCom's website to +3.9%, but so far only this from Lightning saying it's allowed under rules.
https://www.lightningfibre.co.uk/post/how-much-will-...

Experts predict broadband providers will increase internet costs by a massive 14.4 per cent in April, as permitted by Ofcom rules.

The agreement allows companies to raise charges by the rate of inflation - which is now 10.5 per cent - plus an additional 3.9 per cent on top.

Just to add some context,

Hyperoptic don't put up there prices mid contract or at any other point .

My 1Gig connection has remained at £40:00 per mth for the last two years after my first discounted year had passed .No increase regarding inflation and no increase regarding them having higher running costs for some of the points other users made above ^^

higher wages for staff
higher fuel bills
higher electricity costs

the cost of my package has remained the same . it obv works for there business model to operate this way ..... Maybe other ISP'S could learn something from them regarding constant package increases

Edited by djfunkdup (Thu 06-Apr-23 22:52:49)

Surely it is something that would (or should?) come under the terms of unfair contract legislation?

Both parties entered a contract for the delivery of a service for a given period.

Now it is down to the skill of the provider to deliver that contract at the agreed price for the period of the contract.

In some cases (BT, Virgin, etc) those providers have chosen to implement at formulaic increase which will almost inevitably fuel an increase in the base that the formula relies on...

Not that this particular formula is affecting me - my local altnet (for local people) provider gave 24 month contracts as standard (12 available but cost more per month). Their new contracts are on slightly different pricing so if I were to enter a contract for the same service today, it would cost (about 5-6%) more than the one I entered into 15 months ago for the same service, however when it comes to renewal, it looks like they offer a discount for loyalty (presumably because there is no marketing cost involved in attracting a new customer).

In my lucky case - I was going to upgrade speed by 60%, expecting to pay 7% more but actually I'm paying 10% less (having still upgraded by 60%) - Win!

I wonder if this is more of a disease affecting larger ISPs?

In reply to a post by hunnymonster:

Surely it is something that would (or should?) come under the terms of unfair contract legislation?

What is unfair about it? The clause is there in the contact - fully defined and a potential customer can (should) read it.

In reply to a post by MHC:

What is unfair about it? The clause is there in the contact - fully defined and a potential customer can (should) read it.

Most people don't read the contract (although some of us do) and complain when the prices rise in line with the terms of the contract, as much as I don't like their terms if I signed up and they increased the prices I wouldn't be complaining here as I would have known in advance that it was going to happen.

The thing I don't agree with is new/re-contracting customers get a better price, if they think they can justify the price increases in contract then they should charge new customers the same when they initially sign up. I know its a marketing ploy but it shows they would soon lose a lot of new customers.