Business

Minister: 'Outdated' landline charges should be scrapped

Telecoms engineer Image copyright PA

Householders signing up for broadband packages could be exempted from the rental charge on their landline if they don't use it, under proposals to be discussed by the culture minister.

Ed Vaizey has said the charges of around £18 a month are "outdated".

He wants householders to only pay for the services they use, describing the current system as an "analogue billing system in a digital world".

The minister is inviting BT, TalkTalk, Virgin and Sky for discussions.

One in five home owners do not make fixed-line calls, but have to pay for landline connections.

Mr Vaizey said: "If the companies come up with a different pricing structure, that is fine, as long as consumers can see what they are paying for."

The minister said ending hidden costs, such as line rental, could mean other products becoming more expensive, but he wanted transparency around pricing.

Price confusion

The advertising watchdog, ASA, and the communications regulator, Ofcom, are to introduce new rules about how such packages are marketed from May, following research that found there was widespread confusion about prices.

A spokesmen for BT said: "Anyone using broadband uses a landline. I think the focus is more about ensuring clarity around charges when companies advertise their broadband packages.

"BT is happy to meet with the minister and other players in the industry to discuss ways of making charges clearer for consumers."

Image copyright PA

Business services

In a separate development, Ofcom has told BT to install high-speed cables to businesses much faster and reduce the prices it charges for them.

It follows its review into "leased lines" which are used by big businesses and mobile and broadband operators to transfer data on their networks.

Most of these lines are owned and maintained on behalf of competing providers by BT.

BT accepted more needed to be done to meet rising expectations.

Ofcom said BT's performance had not been "acceptable", but the company said some of the regulator's recommendations did little to help it "underpin service improvement".

The draft proposals come less than a month after Ofcom promised measures to improve BT's Openreach operation, which is its business responsible for telecoms and broadband infrastructure.

In February the regulator stopped short of demanding it was split from BT, but said it was still an option.

BT 'relied on'

Ofcom said that Openreach was taking too long to install leased lines and was not providing enough certainty that the services would be provided by the date first given to customers.

The proposed rules will apply to high-speed "ethernet" services, which are the most common type of leased lines used by businesses, as well as older cabling.

BT said laying new high-speed lines was often complex and required street works that created delays beyond its control.

Jonathan Oxley, Ofcom's competition group director, said: "BT is relied on by many companies to install these lines, and its performance has not been acceptable.

"These new rules will mean companies across the UK benefit from faster installations times, greater certainty about installation dates and fast repairs if things go wrong."

Ofcom said since 2011 the average time between a customer's order and the line being ready to use had increased from 40 working days to 48.

It wants that reduced to 46 days by the end of March 2017 and returned to 40 days by 2018.

Ofcom plans to reduce the wholesale prices BT charges for leased lines services over three years and expects those reductions to be passed on to businesses.

However, BT said this would do nothing to help it improve its service to customers.

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