topic Re: discriminatory pricing in Plusnet Feedback

discriminatory pricing

bewick — Sat, 02 Oct 2010 13:09:08 GMT

This may be partially down to Ofcom but Plusnet could ignore the definitions of "low price market" - ie Market 3 - if it wanted.
I live in a rural area. My local exchange is market 2 and unlikely to ever become market 3 (the one which gets the discounts).
BT have no plans to upgrade my exchange to 20Mb (21C?) although Talktalk already provide such from that exchange.
Now I've been a PN customer for a few years now but a new customer, just 7 miles away served by a market 3 exchange could get the services for about 2/3 what I pay - and very likely also get 20Mbps speeds.
I can understand that PN speeds will be limited by whatever BT does or doesn't do in its exchanges. What I cannot see is how PN can charge me more than it charges market 3 customers and often for a slower service.

I may be wrong but I'd guess that PN pays BT wholesale just the same for use of equipment for my connection as it pays for the bloke 7 miles away. Or , to put it another way, why is Plusnet making an extra £5 a month profit from me? Some justification is called for.

Re: discriminatory pricing

Alxns — Sat, 02 Oct 2010 13:25:25 GMT

Re: discriminatory pricing

Oldjim — Sat, 02 Oct 2010 13:38:06 GMT

Quote from: bewick
I may be wrong but I'd guess that PN pays BT wholesale just the same for use of equipment for my connection as it pays for the bloke 7 miles away. Or , to put it another way, why is Plusnet making an extra £5 a month profit from me? Some justification is called for.

You are wrong.
Plusnet pay less on a Market 3 exchange and pass the saving on to the lucky ones

Re: discriminatory pricing

MrC — Sat, 02 Oct 2010 16:20:36 GMT

Quote from: Oldjim
Plusnet pay less on a Market 3 exchange and pass the saving on to the lucky ones

Although it would be 'fairer' if PN normalised their costs across Market 1/2 and 3 exchanges and just charged a single rate regardless of the market classification of a customer's exchange, much like almost all other ISPs. It would make the various products a lot easier to compare as well - the current advertising is hardly transparent

Re: discriminatory pricing

Oldjim — Sat, 02 Oct 2010 16:26:22 GMT

It wouldn't be fairer to me as I would be subsidising the customers in Market 1 and 2 exchanges

Re: discriminatory pricing

ChrisL — Sat, 02 Oct 2010 16:28:24 GMT

Oldjim got there before me! It would make it "fairer" by charging some people more; neither I nor the original poster would get charged any less....
Chris

Re: discriminatory pricing

MrC — Sat, 02 Oct 2010 16:35:02 GMT

Quote from: Oldjim
It wouldn't be fairer to me as I would be subsidising the customers in Market 1 and 2 exchanges

Very true but Market 3 customers also get to see the potential benefits (price, performance, wider choice of tariffs, why) of better competition, while those on Market 1 & 2 don't.

Re: discriminatory pricing

fourfourdevon — Sat, 02 Oct 2010 16:40:40 GMT

If you want to enjoy the benefits of Market 3, I suggest you move to location with Market 3.

Re: discriminatory pricing

Be3G — Sat, 02 Oct 2010 16:43:04 GMT

Quote from: Oldjim
It wouldn't be fairer to me as I would be subsidising the customers in Market 1 and 2 exchanges

I don't know, I think it'd be fairer to have one uniform price and I say that as a market 3 user… broadband is such an essential service these days that I feel everyone should have access to it at the same price and not be penalised on a price basis simply because of where they live. Ultimately, what I'm describing is no different to Royal Mail's universal service obligation… would it be similarly fairer to make people have to pay more to send letters from rural areas? I personally feel it wouldn't be.
Of course, the reason Plusnet offer their market-based pricing isn't through any act of ‘fairness’, rather, it's so they can compete with the LLU operators on the exchanges at which they operate – which will often be market 3 exchanges too.

Re: discriminatory pricing

MrC — Sat, 02 Oct 2010 16:44:41 GMT

Quote from: fourfourdevon
I suggest you move to location with Market 3.

I personally don't give a damn as I'm happy with what I've got. But that doesn't mean to say I think the current system is equitable to the customer which, seeing as it's mandated by OFCOM, it ought to be.

Re: discriminatory pricing

itsme — Sat, 02 Oct 2010 16:48:29 GMT

@Be3g
So you believe that home owners in the Towns should subsidies rural home owners for everything?

Re: discriminatory pricing

fourfourdevon — Sat, 02 Oct 2010 16:49:50 GMT

The telecoms market has never been equitable, but given the restrictions under which Plusnet operate, I think their pricing is both transparent and fair.

Re: discriminatory pricing

Be3G — Sat, 02 Oct 2010 16:51:39 GMT

Quote from: itsme
So you believe that home owners in the Towns should subsidies rural home owners for everything?

No, hence this statement (emphasis added):

Quote from: Be3G
broadband is such an essential service these days that I feel everyone should have access to it at the same price and not be penalised on a price basis simply because of where they live.

I simply feel that broadband should be treated the same as things like landline and the postal service, both of which are not priced by location.

Re: discriminatory pricing

itsme — Sat, 02 Oct 2010 16:53:41 GMT

But they should. End Uses should pay what it cost to supply the service.

Re: discriminatory pricing

Oldjim — Sat, 02 Oct 2010 17:17:52 GMT

A bit like fuel and public transport then.

Re: discriminatory pricing

MrC — Sat, 02 Oct 2010 17:39:24 GMT

Quote from: itsme
End Uses should pay what it cost to supply the service.

Be careful for what you wish for.....

Re: discriminatory pricing

bewick — Sat, 02 Oct 2010 18:13:06 GMT

Quote from: Oldjim
It wouldn't be fairer to me as I would be subsidising the customers in Market 1 and 2 exchanges

Maybe so Jim - but by how much? I feel sure that somewhere on the PN site they say that 80% can get 20Mb - and that will almost certainly be the market 3 exchanges where prices are less... You also say that PN pay more for Market 1 and 2 - but is it REALLY £5 a month.
My exchange now has 4 companies using LLU and they all provide 20Mb speeds. Those same companies no doubt also pay the higher price but actually offer cheaper service.Sadly maybe there is my answer.

Re: discriminatory pricing

bewick — Sat, 02 Oct 2010 18:15:46 GMT

Quote from: fourfourdevon
If you want to enjoy the benefits of Market 3, I suggest you move to location with Market 3.

Stupid answer

Re: discriminatory pricing

Mand — Sat, 02 Oct 2010 20:50:25 GMT

Quote from: bewick
Maybe so Jim - but by how much? I feel sure that somewhere on the PN site they say that 80% can get 20Mb - and that will almost certainly be the market 3 exchanges where prices are less... You also say that PN pay more for Market 1 and 2 - but is it REALLY £5 a month.
My exchange now has 4 companies using LLU and they all provide 20Mb speeds. Those same companies no doubt also pay the higher price but actually offer cheaper service.Sadly maybe there is my answer.

Hi there,
Many market 2 exchanges have 20Mb speeds.
We pay less in Market 3 areas because there is greater competition. If we could charge less in 1 and 2 exchanges that would dissuade LLU providers from investing in those areas (in short, prices for BT Wholesale services are kept higher to encourage LLU investment).
The LLU companies (the ones providing higher speeds in areas where BT haven't upgraded to 20Mb) don't pay the same price as us, because they don't buy services from BT Wholesale. They put their own equipment in the exchange, so can make their own prices.
I can understand the frustration if you live in an area which is never going to be market 3 (I live in a market 1 area!) but I don't feel us charging more in market 3 areas would alleviate that.

Re: discriminatory pricing

David_W — Sun, 03 Oct 2010 14:04:13 GMT

I'm in a Market 2 which will never be a Market 3. It's better than Market 1 however. Market 3 is so that BT can compete against LLU providers with the hope that with lots of competition on M3 areas, LLU's will hit M2 areas to obtain profits where BT cannot compete with them on price (due to being Market 2), when enough LLU providers do that an M2 should hit M3 leading to lower prices.
Not really working out like that though, M1 will *never* have competition, they are lucky if they get BT, so in effect M1's are subsidizing M3's with higher costs so that BT can compete in M3 areas. M2's may end up with 2 or 3 LLU providers but then stall as the exchange hits saturation, there are not enough people in the town to justify another LLU providers investing in the exchange.
I do think though that M1's should have the same discount as M3, there is no chance of competition on an exchange that may serve only 500 people so having artificially high prices to drive competition is counter-productive and will never work.