Ofcom looks at contract opt-outs as users rage over price hikes

UK communications watchdog Ofcom is consulting on whether Brits should be allowed to pull out of any communications contract if the price changes, following widespread outrage at the practice.

The consultation proposes that any change in price would let customers off the hook, letting them walk away from contracts without penalty, so expect it to be fiercely contested by network operators - even if a quarter of those who complained to Ofcom were under the mistaken impression that their price was fixed for the duration of their contract.

Mobile and fixed operators regularly change their prices, generally in line with inflation or at least close to that, but 1,644 people complained to Ofcom in the eight months following September 2011 and most of those felt they had suffered "material detriment" from the increase, which many of them hadn't thought permissible.

"Material detriment" is key, as any change to the contact which causes such detriment allows the signee to walk, and has let many customers out of their contracts in times past, but small increases in price have hitherto been allowed to reflect inflation and other economic changes.

Ofcom's proposal (PDF, surprisingly hard to read) suggests greater transparency - telling customers what they've signed - or requiring customers to opt in to variable pricing, then dismisses both those options as flawed before concluding the only course of action is to lock pricing for the duration of the contract.

The problem is that two years is a very long time. Guaranteeing a price until 2015 is tough, but when that money is needed to subsidise the cost of the latest iThingy, it's even harder. One can imagine a round of inflation, perhaps next year, leaving network operators in the impossible position of being unable to raise prices against rising costs.

The consultation will be heated, but probably end up with fixed-price contracts, which might in turn keep the length down a bit (contracts are currently capped at two years) then we'll all end up paying slightly more in exchange for greater flexibility, and guaranteed outgoings, which is probably for the best. ®