Petition starts for 'upto' charge for an 'upto' service
wispa Limited a communications consultancy based in rural Mid Wales has started an online petition that seeks to pressure Ofcom 'into actually doing something about your ISP charging you full price for an ‘upto’ service'.
Ofcom has a voluntary Broadband Speeds Code of Practice, the most visible aspect of which has been new customers being told what speed they should receive which it seems is not happening for 28% of those who responded to our broadband advertising survey. An often overlooked aspect of this was that if a customer was receiving a speed that more in line with a cheaper product the provider should offer this other product to the customer.
Alas most providers have just one broadband product speed available, and even where different speeds are available other differences like a lower usage limit apply, which will often not be appropriate.
The reason the retail market is like this is the introduction of flat-rate pricing by BT Wholesale back in 2004, where a line card port cost the same no matter what speed you connected at. The capacity and usage pricing elements have then meant that the current retail market of 2GB, 5GB, 10GB, 20GB etc usage allowance services have appeared. The situation is no different with unbundled services, who generally try to undercut BT Wholesale both on price and by offering unlimited packages. The GEA products from Openreach do have some degree of price variation based on speed, there is a £3.12+VAT per month difference between its 40 Mbps and 80 Mbps FTTC services.
If Ofcom is pressured into acting, it will need to re-write the book on broadband pricing, both at the retail and wholesale levels, representing a major change in its regulatory stance, where retail pricing has generally being left to market forces, with broadband starting at zero cost (Sky 2GB Lite service) a possible side effect may be price rises.