Why do ISP charges go up by CPI inflation PLUS x% -- real scam

jimbo45 · Jan 21, 2024

Hi folks
I am starting a 3 month gig in the UK in a weeks time -- got flat etc sorted --but Oh dear -- trying to get a decent Internet contract -- plenty of "B.T / Virgin / other" offers that say £28 a month (not for a very decent speed) but then say after March price will go up by CPI inflation ( a terrible measure - around 9% to 12% at the date the inflation rate was calculated at for the C.P.I rise + an additional 3.7% or similar). Add 20% VAT into the mix and it's horrendous for about 500% MORE per month than I'd pay in Iceland for nearly 1 TBmbs - and the UK company only guarantees around 350 Mbps. at best.

And it's not only the UK -- surely these sorts of deals should be banned -- why should prices go up by that sort of amount -- I'm not anti-profit but with increasingly good technology making the cost maintaining the infrastructure ever cheaper surely just charge people on the cost of maintaining / supplying the service plus for investors some sort of reasonable return.

I'm not a socialist by any manner of means and if private investment helps to improve the whole thing then by all means allow some sort of decent return but this just seems a mega scam of the ist order -- and it's not only the UK -- seems to be similar practice in USA. CAN, NZ, and AUS to name a few.

Sorry for the politics - I have no affiliation to any particular political party or philosophy - but I hate to see obvious exploitation from whatever source.

Cheers
jimbo

PenPusher · Jan 21, 2024

Ofcom will be looking into any UK ISP that wants to have mid contract price rises...

Ofcom proposes ban on inflation-linked mid-contract price rises

Ofcom proposes ban on inflation-linked mid-contract price rises and reveals take-up of social tariffs more than doubled in the last year, but millions remain unaware.

www.ofcom.org.uk

I would not even touch Virgin with a ten foot pole.
Where are you going to be based?

cereberus · Jan 21, 2024

All broadband and mobile phone contracts have this scam.

Recently the regulator OFCOM has been flexing its (weak) muscles saying the contract should state actual price increase including inflation cost (presumably linked to prevailing inflation cost).

From link in previous post #2

Inflation is not as high as you say according to official figures. Currently should be falling to 4% - still too high.

I pay £29 for 900 mbps.
What you do not see is if you have fttc (fibre to cabinet, and use the copper wire to last section to house), you pay c.
£15 per month for rental of an analogue phone (even if you do not need one).

However, UK is changing over to digital phone services which no longer uses the old analogue infrastucture.

I have full 900mbps fibre at £29 per month but there is no rental cost anymore so the broadband cost has really gone up by £15.

If you buy a lower speed full fibre plan, it may be cheaper overall than the older fibre/copper wire plans.

A much bigger scam than the inflation increase is the end of contract scam. My £29 pm is includes a 50% discount i.e. if I fail to put a new contract in place, the cost goes up to £58 per month.

The other scam is if you try to leave a contract early, the greedy b@st@rds value the remainder of the contract at the UNDISCOUNTED price i e. £58 not £29.

Whilst the API scam is morally dubious, the two scams above should be made illegal.

Discounts for the term of a contract should be banned, as they are not a real discount, just a disingenuous advertising scam.

Another advertising scam is £xx per month and small print says cost doubles after say 3-6 months. Older people in particular often fall for this.

ThrashZone · Jan 21, 2024

Hi,
To many people are wising up and cutting the tv cord so increases are needed on internet only plans.

I mean really gigabyte speed plan is nearly 100.us per month.
Hell even bare bones 25mbps plans are above half that lol

fixer · Jan 21, 2024

I'm certainly no expert on this subject but my recollection of what BT had to say when this annual addition to CPI was first announced is that it was to provide funds for high speed broadband to be extended to uneconomic areas, mostly farmland and country villages and the like, where it cannot be justified on financial grounds. I certainly have no objection to that in principle as without it, and given how vital broadband is in today's society, the countryside would become progressively less populated and utilised, and our overcrowded towns and cities would become even more so. Just gotta hope this hopelessly incompetent government is keeping an eye on it!

Bastet · Jan 22, 2024

If you’ll have a decent cellular connection & a high/unlimited data then there’s also the option to use your mobile phone to tether to another device for the 3 months that you’ll be in the UK. Internet providers will require a 12 - 18 (minimum) contract.

iko22 · Jan 22, 2024

Bastet said:
If you’ll have a decent cellular connection & a high/unlimited data then there’s also the option to use your mobile phone to tether to another device for the 3 months that you’ll be in the UK. Internet providers will require a 12 - 18 (minimum) contract.

Yes agreed. If the OP wants a 3 month deal, then pay-as-you-go mobile contract would be more advantageous. The OP also says they are expecting to start in the UK next week. Well, a broadband service will take longer than a week to setup. Mine took me a month to go from one provider to another.

jimbo45 said:
price will go up by CPI inflation ( a terrible measure - around 9% to 12% at the date the inflation rate was calculated at for the C.P.I rise + an additional 3.7% or similar). A

The money has to come from somewhere, and in the UK, it comes from the customer. The British government is investing in full fibre, but that investment only extends to the most remote rural locations who do not have a decent service. So the average customer has to pay for the bulk of the service. Prior to that, in the election of 2019, the socialists wanted to nationalise the Internet infrastructure and give everyone free Broadband - but they did not get into government, so it never happened. Then, allegedly, BT (British Telecom) announced in 2020 that they were going to fix their prices in line with the CPI inflation index, and the other ISPs followed. But then, COVID happened and most companies employees were furloughed. So now BT (and the other ISPs) are now saying they need an "extra 3.9%" (or what ever the rate is) to run their business. COVID furloughs are over now, so presumably the days of this extra charge will soon be over?

ShamrockRig · Jan 22, 2024

cereberus said:
All broadband and mobile phone contracts have this scam.

Recently the regulator OFCOM has been flexing its (weak) muscles saying the contract should state actual price increase including inflation cost (presumably linked to prevailing inflation cost).

From link in previous post #2

View attachment 84737

Inflation is not as high as you say according to official figures. Currently should be falling to 4% - still too high.

I pay £29 for 900 mbps.
What you do not see is if you have fttc (fibre to cabinet, and use the copper wire to last section to house), you pay c.
£15 per month for rental of an analogue phone (even if you do not need one).

However, UK is changing over to digital phone services which no longer uses the old analogue infrastucture.

I have full 900mbps fibre at £29 per month but there is no rental cost anymore so the broadband cost has really gone up by £15.

If you buy a lower speed full fibre plan, it may be cheaper overall than the older fibre/copper wire plans.

A much bigger scam than the inflation increase is the end of contract scam. My £29 pm is includes a 50% discount i.e. if I fail to put a new contract in place, the cost goes up to £58 per month.

The other scam is if you try to leave a contract early, the greedy b@st@rds value the remainder of the contract at the UNDISCOUNTED price i e. £58 not £29.

Whilst the API scam is morally dubious, the two scams above should be made illegal.

Discounts for the term of a contract should be banned, as they are not a real discount, just a disingenuous advertising scam.

Another advertising scam is £xx per month and small print says cost doubles after say 3-6 months. Older people in particular often fall for this.

we have been fibre to box and then copper to house for years and years, never once paid 15 quid a month for an analogue phone what you on about? Dont even have a landline or a phone in the house LOL. Also. Agree to a contract for a specific amount of time...and then want out early? Yeah damn right they wont. I wouldn't either.

abactuon · Jan 22, 2024

English people need to vote for the Whigs.

ShamrockRig · Jan 22, 2024

abactuon said:
English people need to vote for the Whigs.

There are 4 countries in the UK but yeah Engurlund pretty much decide the lot, regardless of if people want it or not lol.

jimbo45 · Jan 22, 2024

ShamrockRig said:
we have been fibre to box and then copper to house for years and years, never once paid 15 quid a month for an analogue phone what you on about? Dont even have a landline or a phone in the house LOL. Also. Agree to a contract for a specific amount of time...and then want out early? Yeah damn right they wont. I wouldn't either.

then why do all B.T adverts on TV include in the "white script" at the bottom = prices increase by 3.7% + CPI inflation in March (and the CPI inflation used was that back in Sept 2023 which was around 8.7% !!!

When I go into an English supermarket I can just see the vast majority of people have no idea of any sensible mental arithmetic to know what they are paying for -- typical example is those dish washing machine tablets -- all sorts of prices with different number of tablets per bag - people haven't a clue on cheapest or best value for money.

I remember doing a gig a few years ago when VAT over there was 17.5% -- and people had the most complex way of working out even if they could at all the VAT payable -- in fact it was primary school simple -- take 10%, then halve that, and halve that again -- 10% + 5% +2.5% = 17.5% -- Q.E.D -- but we always had excellent education.

I've no objection to an organisation raising prices if it's commercially necessary - but just to give a blanket "CPI plus 3.7%" without any commercial reasons for doing so is bonkers especially given the pay to CEO's, bonuses and shareholder dividends.

Why also if I charge an Electric car at a service station I pay 20% on the power --but it's 5% if you charge at a domestic location, I'd have thought though with wanting to get more fossil fuel cars off the road the should be encouraging the use of EV's. Encouraging green power the VAT should be 0% if you charge an EV, not making the cost of using a 250 - 350 Kwh fast charger more expensive / comparable to a full 55 litre tank of diesel !!!! -- but I'm not in Govt !!!

In any case fast cheap broadband benefits everyone -- good for business, individuals etc -- what's not to like.

BTW not sure about VAT on energy for Electric cars elsewhere but the UK isn't alone on these "Inflation + xxx%+ automatic increases --I believe CAN, AUS, NZ, US apply similar sort of rubbish -- so Brits not having a go against you per se- (apart from the very poor maths skills a load seem to have).

It's this whole practice of "automatic rises etc " without commercial justification and usually based on typical poor Govt statistics on Economics -- The Bank of Eng for example has a worse record in forecasting than a decent Horse racing tipster in the popular SUN daily newspaper --and I'm sure the Federal reserve bank in the USA is just as bad.

Cheers
jimbo

PenPusher · Jan 22, 2024

jimbo45 said:
It's this whole practice of "automatic rises etc " without commercial justification and usually based on typical poor Govt statistics on Economics -- The Bank of Eng for example has a worse record in forecasting than a decent Horse racing tipster in the popular SUN daily newspaper --and I'm sure the Federal reserve bank in the USA is just as bad.

Cheers
jimbo

Sadly were all tied to the whipping post

jimbo45 · Jan 22, 2024

PenPusher said:
Sadly were all tied to the whipping post

Virgin Media even more of a rip off -- their prices not even on CPI but RPI which is about double CPI and also uses Sept 2023 as their base.

Since I can hopefully get 5G in the UK I'll just use the phone for Internet via Mobile hotspot. I have with the ISL provider unlimited data usage while roaming in the EU and EEA and for a €10 fee valid per month in the UK too (Oh the wonders of Brexit - that would have been free before !!! - but that's the UK electors choice).

Anyway enough politics for the day -- Problem now solved-- assuming 5G is reasonably available.

Cheers
jimbo

ShamrockRig · Jan 22, 2024

jimbo45 said:
then why do all B.T adverts on TV include in the "white script" at the bottom = prices increase by 3.7% + CPI inflation in March (and the CPI inflation used was that back in Sept 2023 which was around 8.7% !!!

When I go into an English supermarket I can just see the vast majority of people have no idea of any sensible mental arithmetic to know what they are paying for -- typical example is those dish washing machine tablets -- all sorts of prices with different number of tablets per bag - people haven't a clue on cheapest or best value for money.

I remember doing a gig a few years ago when VAT over there was 17.5% -- and people had the most complex way of working out even if they could at all the VAT payable -- in fact it was primary school simple -- take 10%, then halve that, and halve that again -- 10% + 5% +2.5% = 17.5% -- Q.E.D -- but we always had excellent education.

I've no objection to an organisation raising prices if it's commercially necessary - but just to give a blanket "CPI plus 3.7%" without any commercial reasons for doing so is bonkers especially given the pay to CEO's, bonuses and shareholder dividends.

Why also if I charge an Electric car at a service station I pay 20% on the power --but it's 5% if you charge at a domestic location, I'd have thought though with wanting to get more fossil fuel cars off the road the should be encouraging the use of EV's. Encouraging green power the VAT should be 0% if you charge an EV, not making the cost of using a 250 - 350 Kwh fast charger more expensive / comparable to a full 55 litre tank of diesel !!!! -- but I'm not in Govt !!!

In any case fast cheap broadband benefits everyone -- good for business, individuals etc -- what's not to like.

BTW not sure about VAT on energy for Electric cars elsewhere but the UK isn't alone on these "Inflation + xxx%+ automatic increases --I believe CAN, AUS, NZ, US apply similar sort of rubbish -- so Brits not having a go against you per se- (apart from the very poor maths skills a load seem to have).

It's this whole practice of "automatic rises etc " without commercial justification and usually based on typical poor Govt statistics on Economics -- The Bank of Eng for example has a worse record in forecasting than a decent Horse racing tipster in the popular SUN daily newspaper --and I'm sure the Federal reserve bank in the USA is just as bad.

Cheers
jimbo

Yeah all that you wrote there wasn't anything to do with my point, All i said was the charge for having to have an analogue phone isn't the case, as ive never had to and its like that here. As for the inflation stuff etc etc i didn't even mention so yeah. Think you're reply is for someone else.

PenPusher · Jan 22, 2024

5G mmm about that... depends where you are as to what you can get!

RJARRRPCGP · Jan 22, 2024

Looks like there's hardly any 5G, if at all! I think it's 4G at best here, with tons of dead zones! IIRC, go down the street, and you're in a dead zone!
And it's possible for the "4G" to be 3G, because of a weak signal.

jimbo45 · Jan 22, 2024

RJARRRPCGP said:
Looks like there's hardly any 5G, if at all! I think it's 4G at best here, with tons of dead zones! IIRC, go down the street, and you're in a dead zone!
And it's possible for the "4G" to be 3G, because of a weak signal.

Will be in Beverley E.Yorks -- seems they have decent 5G in that area --KCOM also the main local ISP provider apparently has decent internet as do Vodafone and EE on 5G in that neighbourhood and can connect within 2 days once I have landlord's rental argreement signed sealed and delivered - will be fixed on Wed, Arr tomorrow - glad storm gone - also hopefully no volcano problems !!!!.

Problem solved -- also KCOM seems to have a decent fast Internet service no March increase for new subscribers and doesn't seem to block any of the stuff BT, Virgin, Talk Talk etc seem to do. Alows also month per month for short term visitors -- just what I need for a 3 month gig,

Cheers
jimbo

cereberus · Jan 22, 2024

ShamrockRig said:
There are 4 countries in the UK but yeah Engurlund pretty much decide the lot, regardless of if people want it or not lol.

Bollards. It is the ISPs who are scamming people. This has nothing to do with regional politics. I live in Scotland and I do not see any complaints from the Scottish Government although they have the power to act if they wished.

ShamrockRig · Jan 22, 2024

cereberus said:
Bollards. It is the ISPs who are scamming people. This has nothing to do with regional politics. I live in Scotland and I do not see any complaints from the Scottish Government although they have the power to act if they wished.

Oh i wasn't really talking about this subject more of an in general type thing. You know how it is, Full joints corrupt mate.

ShamrockRig · Jan 22, 2024

cereberus said:
Bollards. It is the ISPs who are scamming people. This has nothing to do with regional politics. I live in Scotland and I do not see any complaints from the Scottish Government although they have the power to act if they wished.

Aye once we ask england and all that jazz, If you believe that the snp have the power to change what they want they you a sadly, sorely mistaken. But again dont know how we got side tracked into politics, all i said was, the 15 quid monthly charge for an analogue phone isnt true, as i dont. And then people reply with topics i havent even spoken about...as if i have. LOL