Introduction of Cessation Charge

[#1]

@ pfgpowell
If you were to elect to stop paying your broadband subscription, we would ultimately place a cease order on your line and a £20 charge would be added to the outstanding balance on your account.

[#2]

@samseven

Quote

it seems it may be £5 + VAT.

It's increasing from £4.90+VAT to £15.75+VAT as per Bob's post above.

Quote

Quote from: BT Wholesale New Cease Charge From 8th September 2008, the cease price will change from £4.90 (ex. VAT) to £15.75 (ex VAT) for Datastream, IPstream, IPstream Connect, and Wholesale Broadband Connect. This change will apply to all end user access ceases which are closed and completed (customer completion date) from that date.

The charge levied is the same across all BTWholesale provisioned ISPs.

[#3]

Quote from: davidbull

I'm incensed.

Hi David,
I'm sorry that you feel so strongly about this.
Our deferred activation and house move contracts are factored into our pricing.  Finance and Product go through an extremely complicated modelling process working out how many people would cancel in the first 12 months and base that into the actual pricing.
If we were to do that with the cancellation charge, it would result in an increase in subscription, so we were basically left with two options.  Pass on the charge or increase your costs.  I'm personally happy that we went with the former.
I'm absolutely not saying I like this charge.  I don't and it's a horrible thing to have to tell our customers.  But unfortunately, we're getting charged for it and we have had to pass it on to our customers.

[#4]

There was quite a bit of coverage of this at the time it was announced by BT Wholesale, and there has been discussion with Ofcom that resulted in the price being lowered. The charge covers the physical unplugging of the Broadband line by an engineer when Broadband is no longer required on a line. There are lots of results in Google, but the BBC covered the debate when Tiscali started passing on the charge, eg here.
We certainly haven't decided to pass this on lightly, and it's been the subject of much internal discussion as to how we can avoid it, however the charge is one that we incur now, and which we expect will end up being passed by most ISPs. As an ISP in today's market, I think people might be pretty surprised when they see how low our margins are on products - Absorbing £20 when a customer leaves us just isn't something the current product economics let us sustain, especially at a time when we want to push to keep our existing customers and improve the service we provide. Should we invest in subsidising customers who are leaving us, or improving services for the customers who remain loyal?
Regards,
Ian

[#5]

Quote from: puddy

Are BT/Plusnet making a profit on these charges?  Could we have a break down on these charges please engineer time computer time and staff time etc?

Hi Puddy,
It's not exactly £20 and yes, we do make a slight profit out of the cancellation charge.  However, because we go for nice round numbers, we also make a slight loss on activations.
This affects all of our broadband customers.
If you want a specific breakdown of engineer time and costs incurred by OpenReach/Wholesale, I would suggest that you get in touch with them yourself, as this isn't the sort of information that we would have.
I appreciate that you currently don't accept the changes in the terms and conditions.  However, if you do not either accept them, or elect to leave prior to October 29th, you will be bound to the new terms.

[#6]

This is against freedom of choice in my opinion to leave the service.
However the notice it is according to Ofcom, meeting the obligations of a supplier and seemingly legal. Ofcom have logged my complaint however as they do see the issue with this. If many more people complain, there may be something to do to change things.
I set up and paid for my contract with Plusnet many years ago; met my obligations to stay the minimum term at that time; Plusnet have had many years of my money for their service without issue; I asked for and took no freebies (routers etc) and met all my obligations. I cannot stomach it when a fee is no to be imposed which I see, rightly or wrongly, as an imposed 'tie-in fee' (unless leaving for another supplier) for making sure a consumer keeps broadband - or has to pay to not have it.
Yes I can leave within the notice period and no doubt this is what Plusnet. will say. However to unpick all my communication and registerted emails with many online services I use (banking etc) could take me a while and cause me yet more problems.
How very disappointing.
I have complained to Plusnet and asked them to feed it on to BT Wholesale.
Thank you for reading (if you do) my views.

[#7]

Quote from: Jameseh

This affects all of our broadband customers.

Does this effect PAYG customer?

Quote from: Jameseh

If you want a specific breakdown of engineer time and costs incurred by OpenReach/Wholesale, I would suggest that you get in touch with them yourself, as this isn't the sort of information that we would have.

I am under contract with plusnet and as you well know BT will not talk to me and suggest I ask plusnet so again can we please have a full break down on the charges?

Quote from: Jameseh

I appreciate that you currently don't accept the changes in the terms and conditions.  However, if you do not either accept them, or elect to leave prior to October 29th, you will be bound to the new terms.

I said I will not accept the new terms and condition until I am given a full break down of these charges, we dont know if it cost 1p or £20 to cease a broadband line
puddy

[#8]

So BT have increased their charges from £4.90 to £15.75. That means you are now down by £10.85. Given that you used to have to pay also (albeit a lower amount), there can be no extra administration incurred by you. Execpt possible the "lost interest" between the time you pay BT and the customer pays you (this could also be in your favour if you get the cash before having to pay BT). And yet you are charging £17.02. It seems to me that you are now £6.17 up. Is that fair?
And as to your comment that you make a small profit on this because your charge "round numbers"; All I have to say is £17.02 is not a round number.

[#9]

Puddy, I suspect all that the breakdown of costs that Plusnet would be required to give you if you pushed it in any legal way would be what you have already been told.  ie:
Cost to you: £20
broken down into
Charge by BT Wholesale: £18.51
Admin fee by Plusnet: £1.49
with all prices including VAT
Phil

[#10]

@ Puddy
This affects every Broadband customer.
The cease is performed by BT OpenReach rather than Wholesale.  You would need to get in touch with them as I don't have that information.
I appreciate that you state that you don't agree to the new terms.  We've given you 30 days notice as we are obliged to do.  What you do from that point onwards is your own prerogative.

[#11]

The breakdown is that they will charge you £20 - if you don't like it, you have 30 days to do something about it.
Its pretty simple and straightforward TBH.

Quote from: samseven

So BT have increased their charges from £4.90 to £15.75. That means you are now down by £10.85. Given that you used to have to pay also (albeit a lower amount), there can be no extra administration incurred by you. Execpt possible the "lost interest" between the time you pay BT and the customer pays you (this could also be in your favour if you get the cash before having to pay BT). And yet you are charging £17.02. It seems to me that you are now £6.17 up. Is that fair? And as to your comment that you make a small profit on this because your charge "round numbers"; All I have to say is £17.02 is not a round number.

£20 is a round number - going from making a nett loss per customer leaving of £4.90+admin costs to only charging £1.49 for the admin still strikes me as a likely loss for PN.
Think you need to review your maths (or be thankful you aren't in business!)

[#12]

Maybe I missed it but what happens if someone migrates to an LLU provider using a  MAC code (as I did totally smoothly some while back)?  
On the one hand it has been stated that MAC migrations will not incur a charge, but on the other hand it's a "cease" on the BT equipment......
Note that there are options here - you can migrate BB to LLU (e.g. Be) and leave phone with BT or migrate both (e.g. TalkTalk) which may make a difference?

[#13]

Quote from: Ian

or improving services for the customers who remain loyal?

How can you say that by introducing BBYW you made the service worst why?
Because customers who signed up to BBYW lost 8 hours off peak browsing per day.
I refused to sign up to BBYW because yet again I gave you notice within 30 days that I would not accept changes to my contract and manged to stay on my old contract
Is this charge not a tie in?
puddy

[#14]

I can only assure you that we've already made our feedback on this apparent, and we've spent a long time trying to find ways that we can avoid passing this on. Certainly I don't think a complaint from consumers to Ofcom can hurt and I can say for sure that if BTw did withdraw the charge we'd be pleased to remove it from our terms. It is a very difficult position to be in, but we do our best to be fair, and only pass on charges we incur from suppliers where we have no way to avoid it.
The price is listed in the BT Wholesale public price list here (Do a search for the word Cease), and it works out at roughly £18.50 inc VAT.
Ian

[#15]

@ samseven
The BT prices that you have quoted are ex. VAT.  £17.02 is our ex. VAT figure.
We charge £40 (inc. VAT) for activations.  BT charge us £40.96 (inc. VAT).