Tiscali joins the postcode discrimation debacle

People in rural areas are effectively classed as ‘second class citizens’ in the eyes of the broadband operators, according to independent price comparison and switching service uSwitch.com.

Tiscali has today joined the near-complete list of major broadband companies now operating a two-tier pricing system, with one price for customers covered by their network and another for those that aren’t.

The new Tiscali pricing, effective from 4th June, is great news for the fortunate customers living within Tiscali’s LLU broadband network. They are being offered an 8Mb broadband service, free UK calls and line rental, normally £11, for a total of £19.99 a month. However, the new pricing is less favourable for customers living outside their unbundled network, who will pay £19.99 plus a discounted line rental fee of £8.25 a month for the same services.

Tiscali joins a host of major broadband companies that are differentiating broadband services by price, speed, or sometimes both, according to where people live, suggesting that a new broadband ‘class system’ is emerging. Tiscali’s announcement comes as uSwitch.com reveals that, while broadband prices in LLU areas have fallen by an average of 5% over the last year across the industry, average prices have actually risen by 4% in areas that have not been unbundled. Moreover, four of the major broadband companies – Sky, TalkTalk, AOL and Tiscali – charge on average 91% more to customers living outside their LLU networks.

Steve Weller, Head of Communication Services at uSwitch.com, comments:“It’s very disheartening to see Tiscali jumping onto the anti-consumer bandwagon of imposing additional charges on customers that fall outside their LLU network. AOL announced similar charges last week and we have a growing concern about this becoming standard practice in the broadband industry. It’s simply not acceptable that one customer has to pay more for an identical – or sometimes inferior – service just because their postcode happens to fall outside their provider’s LLU hit list.

“The last year has been remarkable for the broadband industry with a plethora of ultra-competitive deals emerging as companies have battled it out to sign up new customers as quickly as possible. The pace of LLU is accelerating and LLU connections are expected to reach 2 million by the end of the year. Yet nearly 8 million households are still receiving broadband over an IPStream network, owned by BT’s wholesale arm. Customers living near exchanges that are yet to be unbundled are the real victims here as they could find that they are unable to obtain the glitzy deal being advertised.”

Weller continues: “Thankfully, Pipex and Orange have yet to succumb to this practice and it’s a real opportunity for them to become the broadband heroes for customers living in rural areas – although Pipex has said publicly that it is not ruling out two-tiered pricing in the future. We are calling for this new ‘postcode lottery’ practice to be halted in its tracks before all providers join in, denying more consumers the chance to benefit from the great deals that are currently out there. In the meantime, now is the time for consumers to secure a deal that presents good value for both money and service.”