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All inclusive pricing on the way after joint Ofcom and ASA study
Thursday 21 January 2016 00:53:43 by Andrew Ferguson

The ASA is aiming to make broadband advertising simpler and clearer for the consumer to ensure that people know what they will be paying and from 30th May 2016 a new advertising code will come into play.

The new code is not written in stone and is seen as a set of suggestions, which will become clearer as adjudications are made over time and the boundaries of what is considered acceptable are determined. The new rules should mean adverts (and remember adverts these days include a providers own website) should be all-inclusive on all costs and this means including line rental cost and extras the like delivery cost of hardware. Additionally set-up fees to be made more noticeable along with contract length.

The new rules have not been created in isolation a study of some 300 people where people where asked to identify total costs from various adverts was carried out by the ASA and Ofcom working jointly. The headline result and hence the justification for the news rules was in the survey 81% failed to correctly work out the total lifetime cost of a broadband contract.

"Ofcom wants to see clear and accurate broadband prices for consumers. Our research shows many people are confused by complicated ads and offers. We welcome the ASA’s plans to simplify broadband advertising."

Sharon White, chief executive of Ofcom

"The UK has a highly competitive broadband market and informed and empowered consumers are an important part of this. This is supported by Ofcom’s own figures that show the UK benefits from some of the most competitive broadband pricing. Beyond adverts, ISPs provide clear information if consumers engage more closely with them, for example by going to their website, visiting a shop, working with comparison and consumer websites or by calling the providers. This has not been reflected in the survey which is based on a small sample size with some of the reviewed adverts only being shown to 8 participants."

Nicholas Lansman, Secretary General of ISPA responding to ASA research

A single up front price sounds appealing, but introductory offers and promotions may complicate things and this is before you consider that with some providers the bundled router is optional, with some you are not obliged to take voice line rental via them so the price is unknown, some providers have surcharges if you don't pay by direct debit or you want a paper bill sent each month. There is also the question over whether you are migrating to a provider or ordering a totally new service, then there are the optional things that you can add on top, like extra call allowances one presumes these can be listed as extras. The end result might be that providers start list multiple combinations for the same actual broadband product, or reduce the number of price offers so everything is at the standard price but use the reward system of cash back and vouchers to tease people onto the service.

For the biggest providers the complexity is not too bad, but once you reach the likes of AAISP with their many options or others that allow any WLR voice line rental to be running alongside their broadband service things become more interesting. The bundling of voice line rental if taken to the full extreme will also mean that broadband only services that offer an option VoIP service may need to consider carefully how they sell their service in the future.

With over sixty providers listed across a range of technologies ensuring that our own listings fit into the new guidelines will be interesting and a long task, particularly as different providers may interpret the rules differently or be slow to adopt to the new rules.

For those that enjoy the annual moan about voice line rental price increases, the new rules should bring an end to that and replace it with a simpler moan about how the whole package is getting more expensive each year.

So a brave new world awaits us for broadband adverts and providers websites at the end of May and we will have to wait to find out how everyone interprets the new guidelines and whether things will work out better for the consumer.

A thought to end with, where will line rental saver deals fit into this? They have got less attractive over time, so just maybe the new rules will see them dropped to keep adverts and web sites as simple as possible.

"TalkTalk absolutely supports the ASA's findings and we've already called on Ofcom to bring in all-in pricing.

It's obvious that a single headline price is much clearer and better for customers, and we're actually already doing it on a pilot project up in York.

But until the whole market moves to single prices, any company that advertises its products like this will struggle to compete with what look like better deals from other providers. We want Ofcom to be bold and tackle this problem in their strategic review and we would absolutely support them in doing so."

TalkTalk spokesperson

The TalkTalk statement that has just been sent over, is interesting as in the past to work out the cost of fibre based services TalkTalk uniquely listed it as Simply Broadband + fibre cost + voice line rental costs and the offer periods on the two broadband elements could mean that the price changed two or three times during the 18 month contract period.

Comments

Posted by WWWombat 7 months ago
A fair quote from TalkTalk over on the BBC article: "But until the whole market moves to single prices, any company that advertises its products like this will struggle to compete with what look like better deals from other providers."

It looks like everyone needs to be forced to jump at once - so it is good to see it under way.

I'm not sure it invalidates the existence of complicated options. It just means that they can't be advertised...
Posted by andrew (Favicon staff member) 7 months ago
And if they cannot be advertised, they cannot be on a providers website, why?

Because providers websites are under the remit of the ASA too.
Posted by ian72 7 months ago
The problem seems to be that the "price" won't be for the same thing - it may be a total price but the adverts are then going to have to cover a lot of detail as to what is in that price. It is still going to be difficult for the average person to compare things - but like Gas bills, the price per unit doesn't tell you who is the cheapest/best.
Posted by zyborg47 7 months ago
About time too, but Talk Talk was one of the worse to be honest with everything split up. First you got to have Line rental, then simply broadband and then add Fibre on top.
BT have too many packages, even with just broadband, infinity 1, infinity 2, then with unlimited or not. I can understand how my next door neighbours got confused and went for limited infinity and did not realise and then kept getting billed for going over.
Thankfully BT Sorted it out and gave them a reduced price unlimited package, that made it even at the end of 12 months.

Posted by 961a 7 months ago
It seems they have still failed to get a grip on the fragmented cost of voice calls. As an add on free weekend or free anytime calls are virtually impossible to compare for value with the standard cost of calls where the major factor in short or unsuccessful calls is the "set up fee" or connection charge, whatever its called. This fee is currently running around the 17p per call mark
Now how many can establish how many calls you need to make to work out which is cheaper for your actual use of the phone?
Anyone?

Ofcom, are you listeniing?
Posted by andrew (Favicon staff member) 7 months ago
The research of just 300 people does not appear to have asked about call prices, or call bundles.

http://www.thinkbroadband.com/isp/idnet/package/1245.html wonder how we will list packages like this, or maybe we stop listing them as the answer. Since we don't know the voice of the voice line rental.
Posted by TheEulerID 7 months ago
Advertising in this context surely means what is headlined and displayed most prominently. It does not invalidate more complex options and packages on the websites, even if they come under the remit of the ASA. What is surely targeted is the misleading headlining leaving out large and unavoidable cost items.
The more difficult issue is where there are complex packages that can't be directly compared (e.g. where Sky package broadband and content).
Posted by andrew (Favicon staff member) 7 months ago
Actually the product pages are what was presented to the public panel, so implication is that they are looking at those rather than just print, radio and TV or comparison sites.
Posted by TheEulerID 7 months ago
Yes, but it's surely more about the way the main information is presented, not the number of other options that may be available. It's surely about the "core" broadband service and the failure to include the line cost where this is unavoidable. I'm sure it doesn't include optional extras. I know with bundling it's not simple, but the line issue (for the main ISPs) is surely key.
Posted by andrew (Favicon staff member) 7 months ago
It may be that ASA is happy to just roll the line rental in and that's the only change, just need to figure out what to do for the IDNet and other providers where you need rental, but can be from any WLR provider.
Posted by csimon 7 months ago
"For those that enjoy the annual moan about voice line rental price increases, the new rules should bring an end to that and replace it with a simpler moan about how the whole package is getting more expensive each year."

Absiolutely, but it's not just about moaning, it's about transparency and these new rules are also about making things less confusing for the regulators themselves who continually seem to be deceived by what's going on. Ever increasing prices will show that actually competition *isn't* working to drive down prices.
Posted by WWWombat 7 months ago
My ellipsis was indeed to signify some of the things missing - such as the ability to package things on a website that can be considered part of the marketed package, even if not quite "advertised".

How far does ASA's remit stray from "advertising" into the content of an online shopping basket?
Posted by Michael_Chare 7 months ago
The ASA have not addressed the issue that when you order broadband you are 'buying a pig in a poke'. You won't know what the useable throughput will be particularly during the evening until the service has been installed.
Posted by leexgx 7 months ago
@Michael_Chare
for ADSL i agree (they do give a wide range now say between 7-17mb for example) for FTTC they are norm underestimates

unless you got a wacky phone line that goes 1 mile up the road and comes back to the exchange or the cab then not much can be done and if your living at that property and moving from another reseller,you already know what your going to get (unless its virgin then you norm get what you pay for unless the FTTN is congested at your local level)
Posted by leexgx 7 months ago
unless it has changed you can't even see what the full price is after 6-12 month offer price is on BT website when looking at phone and broadband (norm £21 or £26 + £17)
Posted by Michael_Chare 7 months ago
@Leexgx. With ADSL the line may well connect at the estimated speed, but the throughput can be limited by the capacity of the backhaul. I have a Post Office service which can be useless in the evening.
Posted by leexgx 7 months ago
thats a reseller problem typically not buying enough capacity

but it can be total backhaul to the exchange itself i have only ever seen it happen twice (not related your lock speed you got on your phone line with ADSL)
Posted by dsf58 7 months ago
Wouldn't it help if costs where broken down into:
1) Infrastructure (standing charges) - the physical connection.
2) Actual Call usage either bought as a monthly allowance or as PAYG
3) Actual Data usage either bought as a monthly allowance or as PAYG
With all 3 purchasable from separate suppliers?

Competition relies on free flow of information - and bundling just introduces obfuscation!
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