I cannot imagine customers being able to dictate that "We will pay you £X a month minus the CPI rate minus a further 5.918% every March of each year."

Customers have as much power to do that as business do. However, you need to mutually agree a contract and a business wouldn't agree to that - BT will still have enough customers even if a few don't agree to the contract. You would need a large number of customers to leave an ISP to have any impact on this and that just doesn't seem likely to happen.

And once one big ISP starts to do CPI+x% then a lot of others will follow suit (as has happened). There are still some that don't so people can move to them - but as has been seen in this thread the costs of those ISPs may actually be higher even without an annual rise.

We also see the opposite with a number of energy companies who have gone out of business over the last year because they did fix costs for consumers and have folded because of the increases in wholesale prices that the company cannot sustain with fixed price deals.

In reply to a post by ian72:

We also see the opposite with a number of energy companies who have gone out of business over the last year because they did fix costs for consumers and have folded because of the increases in wholesale prices that the company cannot sustain with fixed price deals.

Many of these energy companies failed because of the governments price cap, and there are very few companies left now. I fear that it will now be difficult to have a contract that does not commit to having a Smart Meter.

In reply to a post by ian72:

energy companies who have gone out of business over the last year because they did fix costs for consumers and have folded because of the increases in wholesale prices that the company cannot sustain with fixed price deals.

You will find it was mainly due to the governments energy cap that was put in place to protect consumers although no one ever thought it would mean energy being sold for less than it cost energy companies to buy it. Next energy cap rise in April I believe.

Fixed price contracts will have had a major impact here as customers weren't even paying as much as the price cap. If a company cannot put up prices to keep up with increasing costs then they are likely to go broke. I was specifically comparing fixed price contracts with the ISP way of doing things where they increase prices once a year even in contract.

In reply to a post by ian72:

Fixed price contracts will have had a major impact here as customers weren't even paying as much as the price cap. If a company cannot put up prices to keep up with increasing costs then they are likely to go broke.

Just pointing out that the main cause of so many recent energy companies going broke was down to the government price cap. Worth saying I'm not disagreeing with you about fixed price contracts causing additional issues for energy companies.

In reply to a post by dect:

In reply to a post by ian72:

Fixed price contracts will have had a major impact here as customers weren't even paying as much as the price cap. If a company cannot put up prices to keep up with increasing costs then they are likely to go broke.

Just pointing out that the main cause of so many recent energy companies going broke was down to the government price cap. Worth saying I'm not disagreeing with you about fixed price contracts causing additional issues for energy companies.

Allied to undercutting the bigger suppliers with inadequate risk assessment of the amount by which they did so, and insufficient funds allocated to hedging.

Financial hedging is the action of managing price risk by using a financial derivative (like a future or an option) to offset the price movement of a related physical transaction.

Bog standard business practice for any business buying and selling in international markets. Basically self-insuring against major price and exchange rate swings.

In reply to a post by pluralist:

Allied to undercutting the bigger suppliers with inadequate risk assessment of the amount by which they did so, and insufficient funds allocated to hedging.

Financial hedging is the action of managing price risk by using a financial derivative (like a future or an option) to offset the price movement of a related physical transaction.

Bog standard business practice for any business buying and selling in international markets. Basically self-insuring against major price and exchange rate swings.

Thats a whole nother thread.