Back in May, the Advertising Standards Authority mandated broadband service providers to, from October 31, ensure that their advertised pricing plans reflect all-inclusive up-front and monthly costs as well as post-discount pricing along with line rental costs. The ASA felt that the existing approach towards broadband pricing confused and misled customers about the true cost of subscribing to such services.
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"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,” said Guy parker, the Chief Executive at ASA.
The ASA's directive was in response to an in-depth research conducted by it along with Ofcom in January of this year to assess whether broadband consumers could predict the true cost of their services by looking at advertisements. The research detailed out how broadband service providers levied a plethora of hidden costs during the purchase process and during the lifetime of contracts, making them way more expensive than customers intended to bear.
The research conducted by ASA and Ofcom found that only 23 per cent of participants were able to correctly guess the monthly cost of a broadband contract after viewing an ad. An astounding 81 per cent couldn't calculate the total cost of a contract either and 74 per cent believed that information regarding ongoing costs after introductory periods were very unclear. From today onwards, that will not be the case.
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However, Dan Howdle, telecoms expert at Cable.co.uk, believes that the issues with broadband pricing are far from over. "Even under these new rules, providers are still able to splinter off costs like internet security and whether you’re able to watch your TV service in high definition. It’s the nature of the industry: Providers will always do whatever they can to make things appear cheaper than they actually are," he said.
"But the real elephant in the room here is that, even if we do reach a stage where the prices advertised match those customers actually pay in all cases, broadband remains the only essential utility we buy without knowing exactly what we’re paying for. No one pays a flat tariff for a mystery quantity of gas or an unknown number of kilowatt hours, and yet this is exactly the situation with broadband: Advertised ‘up to’ speeds are simply fiction for many," he added.
Keeping such cases in mind, it will be interesting to see if the ASA and Ofcom will continue to reform the broadband pricing process by forcing broadband service providers to come clean on true pricing of their services during the pre-purchase period. Howdle believes they will, but also adds that it will require 'tremendous hard work' to bring service providers in line and to make them 'act with honesty and integrity.'