Ofcom looks into 'personalised pricing' in telecoms industry

[HEXUS]

Pricing algorithms based on user behaviour are 'unfair' according to research.

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[spacein_vader]

I can't think of a single possible upside to the consumer here. Companies won't be putting money into developing this if they think it's going to lower average prices so it's an attempt to gouge IMO.

[Tabbykatze]

This will horrifically unbalance the accessibility of the internet, are ISPs really that strained that something like this needs to occur?

[philehidiot]

There's no reason they can't offer transparent products based on needs. Those who have very specific, high bandwidth needs are likely to be able to search for services suitable. Those with lower needs can look for services with bandwidth limits or data limits. Adding this kind of pricing means that a company surely has to analyse your use.

Also, I'm sorry but my financial or credit history make NO DIFFERENCE to the price of the service. Adding this in means that they could offer poor pricing to those with a poor credit history, knowing they're less likely to be financially adept.

Also, what happens if someone who isn't technologically adept gets this service, get offered a price and terms of use, and then get Netflix? Then, they get told their use has gone up and the price is doubling. They have no way of predicting this. My parents are not daft but they have no comprehension about how this stuff works. If you want to rewire and replumb a house, ask my Dad. If you want to know how some complex financial thing works, ask my Mum. As for tech, they got the cheapest internet connection they could, which makes sense for email, family history research, etc. They did not understand how this interacted with and would limit their new smart TV with streaming services. 4K telly which looks like a 1980s broadcast? Vey confused parents. This kind of problem would not necessarily be anticipated as the service would be provided and then the price adjusted accordingly.

You could argue this is similar to electricity or water use, but those are long established with few nuances and obvious use. You KNOW if you're spewing water all over the garden from an industrial sprinkler system. You KNOW if you're using the oven a lot and you can't miss a Tesla coil. You may have no understanding how your new TV gets its picture, or that Windows will happily use gigabytes of data in the background. WE know this. I don't think it's fair to expect non techy people to get how this all works.

[alpha channel]

My first gut reaction to this was - ~@#* that! I can only see one way that this could go, and it would certainly not favour the end user. How are you supposed to know if you're getting a good deal? The tech unsavvy would get, as philehidiot says, a right reaming, more so if their usage changed and suddenly their bill would skyrocket.

[watercooled]

Yeah there doesn't seem to be a single upside to this for customers. There are far simpler and less sinister ways of supporting vulnerable customers or those on lower incomes e.g. help with switching, discounts or even vouchers.

However, unless I'm mistaken, this appears to be Ofcom preempting any such move by industry and seeing whether they may need to protect customers against it - that is their purpose at the end of the day, to represent the interests of citizens and consumers, not to help businesses to maximise profits as customers' expense.

You could argue this is similar to electricity or water use, but...

And there are a few more 'buts' on top of those you mentioned. To start with, metered use isn't really comparable for data given that's not what affects the wholesale pricing. It's more complicated than that, with wholesale tending to be sold by things like provisioned capacity or 95th percentile rate if on a shared medium. Neither of those really make any sense for consumer connections. Plus at least in this country, competition has thankfully kept ridiculous data caps at bay for the majority of fixed-line connections.

TBH I don't really see much of an incentive for companies in this country to try this anyway (again, uncapped data is pretty standard now) - there's already plenty of choice out there for packages, and often a fair bit of room for pricing flexibility if you haggle or use comparison sites.

[spacein_vader]

Yeah there doesn't seem to be a single upside to this for customers. There are far simpler and less sinister ways of supporting vulnerable customers or those on lower incomes e.g. help with switching, discounts or even vouchers.

However, unless I'm mistaken, this appears to be Ofcom preempting any such move by industry and seeing whether they may need to protect customers against it - that is their purpose at the end of the day, to represent the interests of citizens and consumers, not to help businesses to maximise profits as customers' expense.

I hope you're right, but you have a much higher opinion of ofcom than I do.

[watercooled]

Added a bit more to my post in an edit before reading yours.

I know what you mean but it's not so much confidence in their tagline, rather I don't see them as promoting this per se, rather evaluating the risks. And they do acknowledge the major concerns raised by the public.

Another edit: They have an email address for feedback, and I'd encourage people to make their concerns known! personalised.pricing@ofcom.org.uk

[PMMEASURES]

Think Ofcom should be probing them all, i not renewed my contact in a number of years as the "special" customer loyalty price is still way more than what i am paying. it just daft i don't need a 100Gb plan or 50gb plan or 20 Gb plan at the cranked up costs just because 5G is out. the masts still do 3G 4G HS HS+ etc no need to do away with the previous plans upping the price for marketing 5G.

[watercooled]

It's always worth shopping around rather than just going with the flow if you don't need what they're offering. It might also be worth trying some of the MVNOs if your data use is relatively low?

[DanceswithUnix]

Also, what happens if someone who isn't technologically adept gets this service, get offered a price and terms of use, and then get Netflix?

Netflix may well be streamed from a Netflix caching server at the ISP, causing negligable Internet traffic for the ISP to pay for. Three already have this factored into some of their phone contracts, some of the video providers don't come out of your data allowance (though some do, so you have to tread carefully).

But I think this really comes down to finding an Internet/Phone provider that plays nice and voting with your feet.

Edit: Something like the online pizza ordering dealbot would probably work.
Pizza is stupidly expensive, but you never pay the actual price. I used to loath having to trawl through the deals to find one that worked well for me, that is the sort of thing you want a computer to do. Some people love to haggle and like to feel they got a good deal. Some, like me, consider the whole process a waste of time and just want a fair price up front. That disjoint makes it hard for any one system to work well.

[BobF64]

Think Ofcom should be probing them all, i not renewed my contact in a number of years as the "special" customer loyalty price is still way more than what i am paying. it just daft i don't need a 100Gb plan or 50gb plan or 20 Gb plan at the cranked up costs just because 5G is out. the masts still do 3G 4G HS HS+ etc no need to do away with the previous plans upping the price for marketing 5G.

But that is how the investment in new technology is paid for, its a ponzi scheme, like state pensions and the NHS.

It's the same when people suggest that everyone pays for what they use. Those that often use the most can afford it least.

For example, poorer people often have a worse diet, end up buying things that are less recyclable etc, so whilst it all sounds good, in practice, it never is, and you end up in a system where the costs are spread over everyone.

[Saracen999]

I can't think of a single possible upside to the consumer here. Companies won't be putting money into developing this if they think it's going to lower average prices so it's an attempt to gouge IMO.

They msy develop it IF they think it gives them an advantage of other suppliers. After all, a primary driver is always to get more customers, and by that yardstick, offerjng a better deal could put money in ckmpany A's coffers and give a better price to consumers, but at the expense of company B's coffers (who just lost a customer).

So, company A develops it to poach from ckmoanies B to F, which means they all have to if one does. And as doing sk will take time, during which any company that does will pinch customers from those that don't for the duration of the tjme to develop, they pretty much all have to develop (if not necessarily deploy) sucg a system in case someone else does.

In other words, pretty much classic "prisoner's dilemma" game theory logic applies.

Also, bear in mind, it is pretty mucb exactly what the insurance industry hax been doing for decades.

Personally, I don't give a hoot about prrsonalised pricing. Someone (DanceswithUnix, I think) said they just want a decent price for a decent service announced up-front, and don't want to spend time faffing about trying to get a deal.

I agree with that. Getting the lowest price isn't always the best deal, especially if it means 'spending' significant time doing it. It's why I get car insurance through a decent broker, and have for a lot of years. Sure, they charge a few, but they also do all ths leg work and I end up with a very competitive quote. Every few years I do a check or two, just to keep them honest, but I've yet to be able to knock more than about £10 off (for similar coverage, with a mainstream insurer), and even when they switch insurers, they do all the paperwork and fill in the forms and I just check it over and give the the go-ahead. It's well worth the fees.

Last time I triec to compare several phone/BB/Tv suppliers, trying to compare exact configurations to get what we wanted, and get the best deal, was a nightmare. So, so far, I still haven't changed. I guess that's personalised pricing i.e. getting stuck witb a bad deal to avoid the hassle of changing.

What I would expect to get, though, is an opt-out for ALL marketing sales calls from my ISP, like I currently have, including offers of personalised deals. Don't ring me, I'll ring you. Or, more likely, I won't.

[BigBANGerZ]

get single-mode fibre into everyone's homes first, then lets talk about variable pricing imho

[siu99spj]

All the above. Don't like personalised pricing but just recently got the benefits of it, twice.

My Home broadband and TV package was coming to the end of it's introductory 'special price'. As their 'special price' was half of what their normal price was going to be, I decided to call them and see what could be done to bring it more in line with what I had been paying (I was willing to drop channels, speed etc.). Literally, in less than 5 minutes, I had agreed to pay exactly the same amount, for exactly the same services for another 12 months. I've heard stories of people who get a whole load of 'extras', by paying a little more, but I was already on one of the cheaper tiers and usually those don't get as many benefits. I just didn't want to be paying twice the price for what I was already getting.

My mobile contractor also decided to tell me my mobile contract has ended (SIM only as the 'new phone' offers seem way too overpriced). The fact that it ended over two years ago was not mentioned, but now they wanted to shift which contract I was on, which would cost 70% more than what I was currently paying. Now, working from home my usage has plummeted (Especially data, but calls too as I just stick my head round the door to talk to my SO, rather than calling). Again, five minutes or so later, I had more minutes, more texts, same data and less than half the price I had been paying (Which was already cheaper than most of my friends).

WTF???? None of these prices were available on their websites (Not even for new or returning customers). Why is it you now have to threaten to leave unless they lower their prices? This is not customer friendly at all and I do not enjoy haggling with people at all (Because there is no way of knowing where the limit is, how much lower can we go before they just say "Sorry, we can't do that, you now have to pay twice what we were charging or lose everything". And yes, that has happened to me, hence the dislike of haggling).

Will I have to do this again in 12 months? Probably. Will I enjoy it? Nope, because I will think why they couldn't offer me this in the first place? It's like the utility companies having to tell you which is their cheapest tariff (And yet seem to only put it to you in the most unintelligible way possible).

Why does it have to be so hard and obtuse? I know companies have to make money, but it wasn't always this hard surely?