British telecoms regulator Ofcom has urged internet service providers (ISPs) to avoid raising broadband prices during the current cost-of-living crisis.
The UK, like many countries, is grappling with sharply rising living costs. Inflation is expected to peak around 11 percent in October, and food price inflation has reached record highs. As a result, household spending power in the UK is experiencing its largest decline in at least three decades.
Companies across sectors are facing higher operating costs and many have reluctantly passed some of those increases on to customers. ISPs have also been affected, but many are better positioned than other businesses to limit price hikes and shield consumers from further strain.
In that context, several smaller UK ISPs have called on Ofcom to prohibit mid-contract price increases. James Fredrickson, Director of Policy at Hyperoptic, said:
“Inflation-busting mid-contract price rises are simply not fair. Most people don’t know it’s going to happen or have no idea how much more they’re going to have to pay. We’ve called on Ofcom and others to introduce tighter rules that will force operators to be transparent about when they’re going to raise prices and customers should have the right to switch provider, without charge, if they’re hit by such an increase.”
Rather than introducing immediate regulatory measures to stop mid-contract price increases, Ofcom has issued a formal request to providers. The regulator asked telecom firms to consider how they can better support customers through the cost-of-living crisis and to think carefully about whether significant price rises can be justified at this time.
Ofcom’s statement accompanied its annual affordability study, which found that nearly a third (29%) of households—about eight million—are already struggling to pay for phone, broadband, pay-TV, and streaming services. The number of families finding it hard to cover these bills has doubled in the last year and is the highest recorded since Ofcom began tracking affordability.
Given the study’s findings, many observers and consumer advocates are likely to view the regulator’s reliance on voluntary action as insufficient. Critics point to previous occasions when Ofcom’s lack of intervention allowed providers to reverse consumer-friendly practices without strong consequences.
For example, after the Brexit vote several UK mobile operators had publicly pledged they would not reintroduce EU roaming charges. Ofcom did not take action when some operators later reinstated fees, and many feel that the current approach to mid-contract broadband price rises risks a similar outcome: households bearing the burden of industry decisions without robust consumer protections in place.
(Photo by Emil Kalibradov on Unsplash)
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