Line rental question

Just something I have been pondering recently...

What would fundamentally break, or anything, if Ofcom forced "line rental" to be a fully transparent pass-through charge (akin to airport taxes on flight tickets) shown as a separate item on a broadband bill, and everything else would need to be bundled to internet service and telephone service?

Now we have the regulated line rental charge from OR, which forms less than a half of "line rental charge" from an ISP, and then especially with ADSL connections, a minuscule "broadband" charge. It is not uncommon to find offers where "broadband" component is zero for a fixed term. ISP line rental charges seem to also be more or less fixed - they all charge the same.

It is obvious ISPs hide most of their operating costs and probably profit generation as well - inside the "line rental" that is not subject to much competition. I remember deals from years ago where there was a discount on line rental if the customer paid 12 months in advance, but even those seem to have disappeared. Line rental charges seem to go up every year, despite Openreach line rental charges staying level or going down.

I as a customer do not benefit anything from an arbitrary split into Broadband charge and ISP part of line rental charge. To me they are just the same, and include backhaul costs, hardware, service, advertising and profit. But as ISPs do not really compete with the line rental component that has very little to do with Openreach line rental, they have actually managed to hide most of their business into a component not subject to competition.

If this split was removed and OR line rental would be the only "line rental", there would be some benefits. First, of course, would be the pass through nature. If OR charges go down, so does a customer bill. Another benefit would be the disappearance "FREE (subject to line rental)" deals, and the whole non-regulated price would be visible there as a lump sum. If the price subject to competition would be around £14 instead of £2, I have a hunch it would actually create better deals for customers.

The worst thing that could happen is nothing. If there is no slack in the ISP line rental, then everyone just keeps paying exactly the same.

Is there a reason for the current model? I have always found the split between broadband and ISP component of line rental confusing, and it obfuscates the true cost of providing an internet service.

H

Urm have you not noticed that broadband adverts are all inclusive based on changes to advertising rules last year.

So if you see "Another benefit would be the disappearance "FREE (subject to line rental)" deals" now then they need reporting to ASA

It isn't compulsory to take a bundled deal that includes line rental. Even BT Consumer offer broadband without line rental, which the customer can place elsewhere.

Many people use CPs (Communications Providers in Ofcom terminology) such as Pulse8broadband that I and some others I know of use, Aquiss, uno and vivaciti for line rental at around £13 per month. Mine is £13 plus £1 for Caller Display. My broadband is with AAISP, previously with Plusnet where it is worth paying the extra broadband cost to avoid their line and call costs.

No call packages with these cheaper suppliers, but those are another scam from the biggies. UK calls are 1ppm or less charged by the second, with no setup costs. Compare with £7 or so per month for "Anytime" calls, and setup charges of over 11p for out-of-package calls plus high charges from the major companies and the extent of the phone side scam is even greater than you point out.

In reply to a post by RobertoS:

No call packages with these cheaper suppliers, but those are another scam from the biggies. UK calls are 1ppm or less charged by the second, with no setup costs. Compare with £7 or so per month for "Anytime" calls, and setup charges of over 11p for out-of-package calls plus high charges from the major companies and the extent of the phone side scam is even greater than you point out.

If you are a heavy landline user why is it a "scam" to take out an anytime call package with the likes of BT/Sky/TalkTalk etc? They are NOT intended for users who make only a few landline calls per month (such as yourself?), such packages may also include unlimited calls to mobiles, 0845 & 0870 numbers potentially saving £100's per month if you make a lot of calls to such numbers. Even better, the likes of BT and Talktalk allow you to use your landline calling plan on your iOS/Android smartphone via their app which i cannot ever imagine the likes of Uno, P8 etc doing. Horses for courses really...

Edited by deleted (Mon 03-Apr-17 15:03:04)

I agree there are some for whom the "Anytime" packages are advantageous, for example those who are old-fashioned enough to make frequent phone calls to relatives in foreign countries, but I know several people in their seventies and older who stopped doing that in favour of facilities such as Skype.

The point is that many are gulled into thinking that such packages are bound to be cheaper than not having them. Simply fail to do the arithmetic.

The Evening and Weekend packages, though cheaper, are even sillier as they don't even give cheap international calls. (So far as I'm aware).

In the case of businesses run from home, which I have a feeling may be your position, it's a completely different question of course from normal domestic use.

Don't the vast majority of 45-year-olds and younger use mobile minutes instead of landline anyway? That's why I use the landline so little, and I am decades older than that. How many of them get E & W by default without realising they can avoid it?

You also need to define a "heavy landline user". BT these days only give free weekend use. Anytime is £8.99. That 899 minutes at peak times on my line, not billed per minute but per second. At off-peak it would be 1,123 minutes.

How many domestic users use that much?

BT E & W is £3.80 per month. But use it during the day and it's 12ppm plus an initial setup charge of 21p. Incredible!

And so on and so on. Even calls to mobiles on Anytime are 8ppm. On E & W 16ppm. I don't know what mine would be but guarantee it would be far less.