Feeds

Ofcom begins crackdown on auto-renew telco contracts

'Man, we're already totally competitive', grumbles BT

Remote control for virtualized desktops

Telcos have until the end of this year to lock landline and broadband customers into automatically renewed contracts after Ofcom kiboshed the practice.

Currently, unless a punter opts out, some ISPs including BT automatically renew such contracts, and apply penalties to small biz and residential customers who leave their service provider early.

As of 31 December 2011, rollover contracts will be banned, Ofcom confirmed this morning. It estimated that about 15 per cent of UK customers who sign up to a broadband and landline provider are tied to Automatically Renewable Contracts (ARCs).

The watchdog said it would require comms outfits to eventually shift all residential and small business customers off rollover contracts and over to alternative deals.

BT, AdEPT Telecom, Axis Telecom, eZe Talk, italk telecom, TalkTalk Business, Titan Telecom, Optimum Calls and others have been ordered to completely remove ARCs from the market by 31 December 2012.

“Ofcom’s evidence shows that ARCs raise barriers to effective competition by locking customers into long-term deals with little additional benefit. Our concern about the effect of ARCs and other ‘lock in’ mechanisms led to our decision to ban them in the communications sector,” said the regulator's chief Ed Richards.

BT said it was unhappy with Ofcom's decision and claimed its customers benefited from discounts granted as a result of offering them renewable contracts with the telco.

"We don’t believe there is any evidence that they damage competition, given that the UK telecommunications market is amongst the most competitive in the world," said a BT spokesman.

"We have worked hard to make sure that customers understand what they are signing up to, including how the renewal works and the charges that apply if they choose to leave early.

"In exchange for these terms, customers receive a significantly lower price, and as the renewal date approaches we contact them to give them 30 days' notice to end the contract without charge."

BT added that it would no longer be selling ARCs to residential customers now that the ban has been confirmed by Ofcom.

"We will be letting existing customers know over the next few months what BT can offer as an alternative, and we’ll aim to maintain the low prices we offer wherever possible, if customers want to stay with BT," added the spokesman. ®

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
Mighty Blighty broadbanders beg: Let us lay cable in BT's, er, ducts
Complain to Ofcom that telco has 'effective monopoly'
Download alert: Nearly ALL top 100 Android, iOS paid apps hacked
Attack of the Clones? Yeah, but much, much scarier – report
Broadband sellers in the UK are UP TO no good, says Which?
Speedy network claims only apply to 10% of customers
Yahoo! blames! MONSTER! email! OUTAGE! on! CUT! CABLE! bungle!
Weekend woe for BT as telco struggles to restore service
Fujitsu CTO: We'll be 3D-printing tech execs in 15 years
Fleshy techie disses network neutrality, helmet-less motorcyclists
Facebook, working on Facebook at Work, works on Facebook. At Work
You don't want your cat or drunk pics at the office
Soz, web devs: Google snatches its Wallet off the table
Killing off web service in 3 months... but app-happy bonkers are fine
prev story

Whitepapers

Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Getting started with customer-focused identity management
Learn why identity is a fundamental requirement to digital growth, and how without it there is no way to identify and engage customers in a meaningful way.
Go beyond APM with real-time IT operations analytics
How IT operations teams can harness the wealth of wire data already flowing through their environment for real-time operational intelligence.
Why CIOs should rethink endpoint data protection in the age of mobility
Assessing trends in data protection, specifically with respect to mobile devices, BYOD, and remote employees.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.