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Trader's Diary

March 30, 2007 3:12 pm

Unlimited broadband

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In the old days, when a business promoted a service or product that was “unlimited”, that was what you got, whether it be a bottomless coffee cup or top-ups at the pizza bar.

Now the phrase “unlimited” is being used by marketers to sell services that seem to be anything but. This is most evident in the broadband market where millions of consumers have signed up to “unlimited” packages, expecting to be able to download without restriction. But the packages aren’t quite what they seem with most operators quietly applying “fair” or “acceptable” usage policies on the contracts – and disconnecting customers deemed too greedy.

Virgin Media’s non-cable broadband and talk packages say they provide “unlimited” downloads. But click through to the “legal stuff” and you’ll find you could get disconnected if you exceed its fair usage “guideline”. This has previously been set at 40 gigabytes, but following queries from the FT this week, Virgin removed this 40Gb threshold. Equally vague on fair usage are other providers, such as BT, Sky and Tiscali.

Most operators will warn customers with an e-mail or letter before they act. But others such as AOL, may, without notice, slow the user’s bandwidth for “excessive online behaviour”. This could be downloading more than 60 movies a month, for example.

Operators say the term “unlimited” is used because for the majority of internet users the thresholds are high enough never to be breached. Operators say “fair usage” policies are needed to weed out heavy users, such as businesses, whose excessive downloading could spoil the service for other customers.

This sounds pretty reasonable. Trouble is they don’t spell this out in their ads; you need to probe the small print to find out what “unlimited” actually means. Providers also reserve the right to change these policies without warning. Uswitch, the price comparison website, has called for an advertising ban on the use of “unlimited” unless the service truly has no limit. So far, its efforts have resulted in one operator, Toucan, removing “unlimited” from its website. Consumers who feel they are getting a raw deal can complain to their provider or Ofcom, the broadband regulator.

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