Hyperoptic takes on Ofcom on consumer pricing
Hyperoptic is taking on the British regulator on behalf of consumers as broadband providers implement "above-inflation mid-contract price rises".
Hyperoptic has written to Ofcom, calling for it to investigate the use of above-inflation mid-contract price rises, which it says are being implemented by "many major broadband providers". Hyperoptic is also asking the regulator for reforms "that would allow impacted customers to terminate their agreement and switch providers, penalty-free".
The fibre builder and service provide – which is building full-fibre urban networks to deliver up to 1 Gbps across the UK – said it has taken on the cause because it thinks current rules are being flouted.
James Fredrickson, director of policy, and regulatory affairs for Hyperoptic told Capacity: "Ultimately it is Ofcom's duty to protect consumers in this market. We don't think the current rules are being met, so an investigation is necessary to assess compliance. As part of this, we are also asking Ofcom to consider changing the rules, so customers have the right to change provider, free of charge, if they are hit by an above inflation price rise mid contract."
Current Ofcom rules require providers to offer customers the right to exit their contract, penalty-free, if they surprise them with mid contract price rises. However, most broadband providers (BT, EE, Plusnet, Vodafone, O2, TalkTalk, Shell Energy, Sky etc.) avoid this by adding details of an annual price rise into the ‘small print’ of their customer contract.
This can lock customers into a contract where they end up paying significantly more than the initial advertised price they signed up for.
With inflation running at a thirty-year high, this has led to some customers facing a hike of almost 10%.
Fredrickson said: “Households are already hurting from inflationary pressure on core products like food, petrol and energy. It is then startling to see that the majority of broadband customers are unaware of being locked into price rises of this scale.
“It is imperative that Ofcom, as our industry regulator, urgently investigates industry compliance with the rules governing price variation clauses. As part of that, Ofcom should also consider making these price increases far more visible to customers – with a view to ultimately giving them the right to leave their agreement without charge should they feel that they could get a better deal elsewhere.”
So far, Ofcom has responded to say that “companies do need to invest in their networks, but this is a difficult time for many people to deal with price rises. Under our rules, providers must set out price rises clearly before customers sign up and cannot just include them in the small print.”
In other news, at the end of last year Hyperoptic named former BT engineer Lisa Neale as its new MD of Infrastructure.