In reply to a post by XGS_Is_On:

On the topic of inflation CPI can be negative and the +3.9 reflects ongoing and continuous infrastructure investment to manage 30-40% increased data usage each year, but given you seem to think ISPs don't own any infrastructure and apparently have no function or cost other than to resell the access network this may be lost.

What infrastructure investment are making a reference towards. The largest infrastructure provider for telcoms in UK is Openreach and they keeps asking Ofcom to be allow to reduce it wholesale rates, some times it has been aproved. So when infrastructure provider reduces there wholesale we all have got a reduced price! When did that ever happen again?

They just want they cake and eat it. They want you to agree to long term contract where they increase your price by unknown amount with CPI and then +x% and if dont want to stay a "Get out jail" charges. There point where things start to look like an abusive practice. It sound like when use to say Unlimited which had a (FUP) ie set limit, the great weak Ofcom allow they get away with that as well.
Other regulators have crack down on abusive practice which have same same sort issues when Ofgem banned prices increasing during fixed term contracts. There is not reasion why Ofcom could not do same thing.

Or what am I missing, it would be great if they could enlightening us all and what it is. As said I never work telecoms sector and I really don't know. I would like to know but until it show to us otherwise what am I going to think? I dont mind being wrong but from my point reference says this is just wrong. I would like if my income where base of RPI and extra uplift of +3.9% ever year, if only.

We are not ask for cake and eat it. We want fair deal. IE first mouth it is £50 that month and on 18 month (of 18 month fixed term contract) it £50 and not £52.12/£58.43/£72.32. If can not do that way for 18 months term then dont sell for that long.

In reply to a post by amiga_dude:

What infrastructure investment are making a reference towards.

The bit in between Openreach and the Internet.

The data doesn't make its own way there and Openreach don't take it there, they hand it over to their customers at one of about a thousand exchanges in the UK. The Internet doesn't connect to those thousand exchanges so all our data needs transporting, in some cases a thousand kilometers, after a journey of as little as a few hundred metres via Openreach.

On the matter of reduced wholesale rates ISPs are sometimes tied into contracts with their suppliers and those don't change because of a rate change.

On the matter of what Ofgem might do power is both metered in most cases and subject to a price cap which is not the case for broadband.

On fair deals read the pricing and if you don't like it don't sign up, go somewhere else. The UK has one of the best value broadband markets in Europe relative to incomes and quality.

In reply to a post by XGS_Is_On:

The bit in between Openreach and the Internet.

Before broadband we used to dial in to different ISPs. All the Openreach vans aroudn here say "connecting you to your network". (You=your home, and network=your chosen internet provider).

If you're with Virgin Media it is possible you don't use any Openreach infrastructure, but it is possible VM pay Openreach for links between data centres where they need additional capacity or diverse routes.

In reply to a post by Oliver341:

Quite baffling how they managed to sell this to Ofcom really. If the companies are concerned that the price is too low to maintain over the duration of the contract then they should just make the price higher to begin with.

That's not at all the reason.

The reason for this practice is simply to make the price you pay *look lower* than it really is, at the time you sign the contract. It's to make people think they are getting a better bargain than they really are.

When people compare the price of two contracts, they look at the headline monthly rate, and possibly any up-front setup fees. But they don't work out in their heads what the total cost over the contract is, nor the average monthly rate over the contract.

So really, it's because the competition between ISPs is so cut-throat and the margins are so wafer-thin, that companies are resorting to measures which makes *their* product look 50p per month cheaper than their competitors. And once one competitor does it, all the others are forced to follow suit, or else lose business.

If Ofcom were to make companies publish their TCVs at time of order, using an assumed inflation rate of say 5%, it might help fight against this practice. But it would be simpler to fix the price for the duration of the contract. After all, why should customers have to take the double risk of a long-duration contract *and* unknown pricing?

In my opinion, the worse practice is having out-of-contract prices which are often double the in-contract prices. All the costs of setting up a connection are up-front: Openreach installation fee, supplying the router, cost of sales and marketing, credit check, billing setup. After that, providing the service is cheap. The price should *fall* at the end of the contract period, not rise.

As things stand, people who don't know when they might move house (e.g. renters) are forced either to pay through the nose, or to risk taking on a renewal contract which they might have to buy themselves out of later.

VM own their core besides some in Scotland that I think is owned by SSE. VM's network stops at Glasgow and they lease fibre to get themselves further north.

Openreach were used for simplicity and because they are the biggest wholesale access network provider.

In reply to a post by candlerb:

The reason for this practice is simply to make the price you pay *look lower* than it really is, at the time you sign the contract. It's to make people think they are getting a better bargain than they really are.

I was referring more to the arguments they were making to Ofcom. I have a hard time believing even Ofcom would sympathise with that one.

Even Zen, which made a selling point of "we might be a bit more expensive than the competition on day one, but we'll never raise your prices" have now dropped the pledge for new contracts, including regrades and house moves. They haven't said that they're going to get on the RPI +3.9% annual increase train, but I'm sure it's on the way.

In a way, it's understandable as their main supplier are increasing their prices, but I think they've underestimated just how many people signed up to them based on the price promise. A lot of people will get hit with this over the next few years as customers regrade from FTTC to FTTP services (either voluntarily as services arrive in their areas or involuntarily because copper/PSTN is being withdrawn).

Incidentally, it's put me off upgrading. I was considering going from 40/10 to 80/20 (my FritzBox reports my maximum attainable download speed in the 72Mbps range, so it'd be a decent upgrade) but will not bother until it's a bit clearer what this change actually means.

Edited by misstuned (Thu 02-Jun-22 15:06:59)

I agree that automatic inflation linked rises are a very unwelcome move from ISPs.

If you want it changed, you would be better writing to your MP asking that they request Ofcom review this and prevent price increases while customers are in any minimum contract period

Costs can increase over time, but it's fairer for customers if an ISP sets a realistic price taking this possibility into account when customers takes out new contracts.

Edited by gt94sss2 (Thu 02-Jun-22 19:27:17)