Broadband providers told to include line rental in their pricing
Broadband pricing is set to become a whole lot more straightforward later this year, thanks to a new ruling by the Advertising Standards Authority.
From 31 October, broadband ads will be required to clearly show the total monthly cost for the service, as well as give greater prominence to up-front costs, post-discount pricing, and contract length. The move should bring increased transparency to broadband prices, and make it easier for users to compare services from different providers.
Until now, broadband suppliers have been able to entice new customers with very low and attractive introductory rates, hiding in the small print the line rental fees that typically add an extra £15 or more to the tariff. Additional costs, including price increases after an introductory offer ends, and one-off charges for things like installation and hardware, are also frequently de-emphasised or even hidden in ads. Under the new guidelines, all of these will need to be made clear.
ASA guidelines for price claims in broadband ads:
- Show all-inclusive up-front and monthly costs; no more separating out line rental
- Give greater prominence for the contract length and any post-discount pricing
- Give greater prominence for up-front costs
TalkTalk is the first major broadband provider to announce it will be adopting the changes. The company has said it will scrap separate line rental fees in favour of a new all-in pricing model.
“As long as line rental and broadband are priced separately, the temptation to advertise deals in this way will always be there," said Tristia Harrison, TalkTalk’s Consumer Managing Director. "But it’s time for providers be honest about this - it’s a bad habit we have all been guilty of, it doesn’t serve customers well and it’s time it stopped."
The action comes after a survey by the ASA and Ofcom found that less than a quarter of people could identify the monthly cost of a broadband package after a single viewing of an ad. A further 81% of those questioned were not able to calculate the total cost of a broadband contact.
However, a few concerns have been raised within the industry. Chiefly, these revolve around the requirement to combine broadband and line rental pricing, and how it will affect smaller providers that do not offer line rental, or those that allow customers to take line rental from a different provider. Virgin Media has also complained that the ASA's review of broadband advertising has not addressed claims on broadband speeds, when the quoted speeds are often only attained by 10% of users.
For most customers, the changes should be a welcome step towards bringing clarity to internet pricing. It remains to be seen what new promotions providers will offer to differentiate their products.