Broadband on Market 1 Exchanges

[#1]

I am on a Market 1 exchange and most of my friends to whom I have recommended Plusnet are on Market 3 exchanges and paying only £6.49 for 10 gbyte usage. If I want 10 gbyte I have to pay nearly twice as much.
It seems we are subsidising those who are on Market 3 exchanges.
Would it not be fairer to spread the cost and all pay an amount in between the two tariffs.
Or else give those who have been with Plusnet for many years as I have and on a market  1 exchange some sort of loyalty bonus

[#2]

sorry you will have to blame OFCOM, thay made the rules to force BT to let the likes of TalkTalk,Virgin,OR,Orange onto the market  1 and 2, then the Market 3 BT were allowed to drop the price to get their own back on the LLU operators

[#3]

True, it's all down to OFCOM, but I've yet to see an explanation as to why it's only Plusnet (AFAIK) who make this distinction when offering different prices to customers depending on where they live.

[#4]

Most likely other ISPs keep the savings for themselves and charge the Market 1/2 rate for all services. PN pass on those saving to their customers.

[#5]

or BT does not offer the lower rate to the other ISPs. I don't believe BT on a market 3 exchange have any obligation to treat all the ISPs the same.

[#6]

That has to be completely wrong.
The underlying legal position of BTw prohibits selective pricing and if, just supposing, you were correct where are the screams from the other ISPs
Basically the other ISPs are using a uniform pricing structure to allow the market 3 users to slightly subsidise the market 1 and 2 customers

[#7]

Quote from: itsme

I don't believe BT on a market 3 exchange have any obligation to treat all the ISPs the same.

Surely they do? 
Peter's explanation seems eminently plausible.

[#8]

I don't agree with

Quote from: pierre_pierre

sorry you will have to blame OFCOM, thay made the rules to force BT to let the likes of TalkTalk,Virgin,OR,Orange onto the market  1 and 2, then the Market 3 BT were allowed to drop the price to get their own back on the LLU operators

that it is all down to OFCOM decisions. Much of the difference (60%?) is down to Plusnet marketing decisions. Those of us on market 1 & 2 exchanges are clearly subsidising Plusnet's attractive (and very competitive)  headline pricing for market 3 exchanges.
I am on Extra (market 1) and paying £17.99/month, a market 2 customer gets exactly the same service for £15.79 (£2.20 cheaper) while a Market 3 customer gets it for £11.49 (£6.50 less).
As far as I can see from BT Wholesale's price lists Plusnet pay BTW £7.66+vat per month for a customer on a market 1 or 2 Exchange (tiers E & C in BT Speak)  and £5.88 plus vat for a customer on a market 3 exchange (tier A). Bandwith and connection charges appear to be the same for all tiers of exchange.
So I as a market 1 Customer I cost Plusnet £2.14 (inc vat @ 20%) more than a market 3 customer while paying £6.50 more - an additional £4.36 each month in subsidy to the market 3 customers. The market 2 customer costs Plusnet  exactly the same as I do, but is only asked to contribute £2.16 to the subsidy to keeping Plusnet extremely competitive in Market 3.
Unless Plusnet are buying the optional "Elevated Best Efforts" (£3.40 +vat  in markets 1 & 2 , £1.70+vat in market 3) and "Assured rate" (0.50p in Market 1, 0.20 market 2 and 0.1) in market 3), whatever they are, I can see no other geographically tiered cost that might justify the differentials Plusnet charge.
I like the service I get, I like the support and am willing (so far) to pay a reasonable  premium for those features but I can't help but feel that I am being taken for a bit of a ride. It would be nice to think that those on market 3 were also paying the premium for the high quality services that Plusnet offer - and not  simply getting the cheapest deal going  at my expense.
This is made more galling by the fact that exchanges like mine have no ADSL2+ date or any prospect of being allowed to join the FTTC rush - so we are typically stuck with way less than 8Mbits while we watch the subsidised market 3 customers complaining that they are not getting their full 20meg!!!
[I am quoting  prices from 1st Nov 2009 - all the later prices I can find show no differential and apparently  BTW now charge the same (low) prices for all geographic tiers on WBC, but not apparently on WBMC which Plusnet use]

[#9]

Quote from: Oldjim

That has to be completely wrong. The underlying legal position of BTw prohibits selective pricing and if, just supposing, you were correct where are the screams from the other ISPs

I can't find in BTw price list http://www.btwholesale.com/pages/static/service_and_support/service_support_hub/online_pricing_hub/S... any different monthly pricing for ADSL based on market rating of the exchange. It only state the standard price of £5.88 per month and as it's stated as standard I read that as BTw have the right to negotiate different rates.

[#10]

Having looked at the relevant OFCOM documents re Market 3 they say:
1.9 Given the finding of no-SMP in Market 3, no ex-ante regulatory remedies will apply in
this market. However, Ofcom is requiring a 12 month notice period for customers
who have existing contracts with BT, so that they can continue to operate while they
make any necessary alternative arrangements.
1.10 All existing regulatory remedies that stem from the previous wholesale broadband
access market review will cease to apply.
My reading of that is that BT can negotiate whatever pricing they want in Market 3 with whoever they want. If PlusNet negotiate a specific deal there's nothing to say that another ISP will achieve the same, worse or better.
That said, there could be other regulations that come into effect regarding unfair competition etc. so extreme predatory pricing may be outlawed for example.

[#11]

Thinking about this I suspect Plusnet have dug themselves a bit of a hole - and may be struggling to find a way out.
BTW appear to have removed the cost differentials between exchanges. Plusnet's pricing strategy has been predicated on this differential and has subsidised market 3 from markets 1 & 2. I suspect they can't afford to reduce the prices in markets 1 & 2 to those they offer in Market 3 and still make a satisfactory profit. What do they do?
1)Increase Market 3 prices to allow them to reduce markets 1 & 2 - on the grounds that BT have reduced their wholesale costs? What do you think the reaction to that might be?
2) Keep the differentials - and hope that the punters on Markets 1 & 2 don't defect when they discover they are paying over the odds for exactly the same service.
3) Gradually erode the differentials?
My bet is 3 - as prices evolve in the market I expect that market 1 & 2 pricing will  go down - or up less than that in Market 3.
Any Opinions?

[#12]

I don't believe BTw have differentiated the standard monthly rate for exchange market classification. So for a market 3 BTw may only be charging PN £2 but for a market 1 it could be the standard rate of £5.88.

[#13]

Quote from: itsme

I don't believe BTw have differentiated the standard monthly rate for exchange market classification. So for a market 3 BTw may only be charging PN £2 but for a market 1 it could be the standard rate of £5.88.

Doubt it the other ISP's would have raised a stink.
Still wouldn't explain the pricing differential between M1 & M2

[#14]

My exchange is market 3 according to samknows as is the main central Sheffield exchange.
However I've just started a sign up process with Talk Talk and Virgin using a telephone number for each exchange and both quote me a higher price on my exchange than the Sheffield exchange.
My conclusion from that is that samknows.com is wrong and probably all ISPs have it correct so I will wait out the 12 months.

[#15]

Quote from: wisty

Doubt it the other ISP's would have raised a stink.

How/why? It's deregulated.