Advert Watchdog Forces ISPs to Include Line Rental into Broadband Price - ISPreview UK
The Advertising Standards Authority has today confirmed that fixed line broadband providers in the United Kingdom will, with effect from 31st October 2016, be required to offer clearer advertising of their service prices by including the cost of line rental into their total monthly fee.

The new proposals were first mooted at the start of this year (here) and have also received support from the Government’s Digital Economy Minister, Ed Vaizey, who only last month demanded “much clearer information from providers” and said that “all providers … should get rid of landline rental and just charge people for what they are buying: broadband, TV and a telephone service” (here).

On top of that a tiny ASA survey of just 300 participants claimed to add some weight to the argument by finding that only 23% of participants could correctly identify the total cost per month after the first viewing of a sample advert and 22% were still not able to identify the total cost even after a second viewing. Similarly 74% believed that information about one-off and on-going costs after an introductory period was either fairly or very unclear.

The ASA’s Final Recommendations for Broadband Price Claim Adverts

  • Adverts must show all-inclusive up-front and monthly costs; no more separating out line rental.
  • Adverts must give greater prominence for the contract length and any post-discount pricing.
  • Adverts must give greater prominence for up-front costs.


Today’s recommendations are broadly a positive move and appear to be largely unchanged from the provision proposals, which is despite ISPs raising a number of concerns about the move (particularly in regards to the forced inclusion of line rental (here) and the lack of more solid survey evidence); the other two recommendations appear to have been widely accepted.

As such the main bugbear appears to be with the ASA’s original proposal and Ed Vaizey’s comments, both of which seem to assume that broadband and line rental services are always taken together via the same ISP, but the real picture is often much more complicated.

In reality hundreds of ISPs, both big and small alike, also sell line rental / phone and broadband services as separate products that can be mixed and matched between different providers (this is also how most ISPs buy it from BTOpenreach) and many consumers take their connectivity that way. Elsewhere some pure fibre optic (FTTP/H) and cable coax ISPs can also sell a truly standalone broadband service without the need for a separate line rental / phone service or with an optional VoIP product.

All of this means that the ASA may solve one problem (clearer bundle pricing), while at the same time adding some new confusion elsewhere. Likewise it’s unclear what this means for the future of annual pre-paid line rental discounts (e.g. Line Rental Saver), which could become even trickier to promote.

Guy Parker, CEO of the ASA, said:

“We recognise the importance of broadband services to people’s lives at work and at home. The findings of our research, and other factors we took into account, showed the way prices have been presented in broadband ads is likely to confuse and mislead customers.

This new tougher approach has been developed to make sure consumers are not misled and get the information they need to make well-informed choices. We’ll support the broadband industry as they move towards changing their approach in time for the October 31 deadline.”
An ISPA Spokesperson said:

“The UK ISP market is hugely competitive, with speeds rising and low costs for consumers due to our members’ innovation. ISPA supports the ASA’s efforts to make it clearer and easier for consumers to understand the total cost of a broadband package. We welcome that the ASA has taken on board our feedback and excluded providers that do not offer line rental as the market becomes more diverse with evolving products and services to consumers.”
We should clarify that the ASA defines “total cost per month” as the cost (if any) of the broadband service itself plus the monthly line rental. Combined, this forms the cost per month at the outset of the contract, after any one-off set-up costs have been paid and accounted for, and before the end of any introductory period.

Previously there had been some concern that the ASA might also try to force setup / installations costs into the monthly rental, which would have been chaotic given that such fees often vary significantly depending upon how you’re connecting to the service (e.g. the high cost of a brand new phone line install vs a cheaper broadband-only activation or migration etc.).

Furthermore the ASA have clarified to ISPreview.co.uk that their new price consolidation rules are only being recommended for ISPs that offer line rental and broadband bundles, but the rule for ISPs that don’t force bundles is still a bit confusing.
An ASA Spokesperson told ISPreview.co.uk:

“Consolidation is only recommended where both broadband and line rental are offered by the provider. Providers who offer their own line rental but allow customers to use an alternative provider will be expected to consolidate the two prices. If they wish, they could include a qualification to make clear that, should a consumer wish to use an alternative provider for their line rental, the cost of broadband alone would be £x. We have clearly communicated this point to relevant stakeholders including ISPA.”
After reading the above and somewhat confusing quote it seems as if there’s a risk that the new rules might extend beyond bundles, which could make life more difficult for smaller ISPs and create further consumer confusion (we have asked for further clarification).

For example, let’s say you take your phone line rental from BT and buy broadband over the top of that line from AAISP. The ASA seems to be saying that AAISP, which also gives the option of taking their own line rental for an extra +£10 per month with the broadband, should show that same broadband package with the line rental cost included. But this seems ridiculous if you’re only buying the broadband from AAISP and not optional line rental (i.e. NOT bundled from the same ISP).

We do however note that if an ISP only sells broadband and they have no line rental products whatsoever then related providers are exempt from this rule. Similarly the rule only applies to home broadband services, which seems to create a potential grey area for those selling domestic grade “business” broadband packages or bundles, which domestic consumers can also buy.

In any case these are the new rules and we too are in the process of updating our listings to reflect it. Our solution will involve treating all ISPs that offer broadband and line rental products (separately or not) as bundles, but we will also do a separate list that shows entry-level broadband packages with the line rental cost excluded, where offered by ISPs. This should go live soon.

Elsewhere TalkTalk has already become the first to support the new advertising rule (here) and they plan to implement it during the autumn. Otherwise any ISP that is advertising prices for home broadband and is unsure how their current pricing might need to change in line with the new approach should get in touch with the CAP Copy Advice (here).

SIDE NOTE
: Many ISPs on Openreach’s (BT) national telecoms network price their line rental and broadband service separately because that is historically how the services are sold to them by BT and the new rules do not change that. Generally the line rental from BT is a physical product, while broadband is an optional add-on that goes over the top. BT are working on a new SOGEA solution that would offer a truly standalone FTTC (VDSL) “fibre broadband” service (details here, here and here), but that’s not expected to launch until 2018 and one way or another you’ll still pay for the cost of the line.