All inclusive pricing on the way after joint Ofcom and ASA study
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.