Michelle Donelan, the United Kingdom’s Secretary of State for Digital, Culture, Media and Sport warned the telecommunications industry against hitting consumers with additional rate hikes. As the Financial Times reports, in some cases, rates have risen as much as 14 percent since last April.
“At a time when families are struggling to pay their bills,” Donelan stated, “Imposing above-inflation price hikes is not the right thing to do.” She added that while providers’ strides towards “investing billions to roll out better broadband” were admirable, she would contact these companies “to urge them to think before [raising prices again]”.
Data released by the government acknowledged that the consumer price inflation index was up by 10.5 percent in December. Internet providers have historically tied their rates to the inflation rate, plus approximately 3.9 percent. Given the spike in the inflation rate, the government, and others, have voiced concerns about the predicted 14 percent increase that is anticipated to be a punitive cost for many subscribers, according to Financial Times.
Ofcom has already turned its attention to transparency issues in the industry, and how consumers may receive, or understand, the pricing systems employed by broadband carriers.
Lucy Powell, the Labour party’s lead spokesperson on cultural issues, echoed the Conservative party concerns expressed by Donelan, calling the predicted rise in broadband costs “eye-watering.” She said she would like to see the government “intervene urgently and stop…providers cashing in on broadband whilst families and firms struggle.”
While many of the broadband providers declined to comment, BT confirmed that it does intend to raise its prices at the end of March and said the increase would likely be about £1 per week ($1.24) for most people. It made a point of noting that approximately three million people on less expensive subsidized plans would not see an increase. In its response, U.K. carrier Three stated that its “prices remain some of the most competitive in the market and this increase will allow us to continue to invest to ensure we have a strong network.”
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