Mandatory NTL Phone Service for TV Customers - Discuss

[Gareth]

OK, I'm starting this thread as a result of some comments in the 10 Mbit/sec thread which were leading that one astray...

I think we're all aware of the background, but to clarify NTL require you to take out their telephone service when you order digital TV. The cost of this is £10.50 p/month for line rental, and this is added on separately to the price of the channel packages. For example, the digital TV Base Pack costs £11, but in order to get this, you also need to add on the telephone package, at £10.50, irrespective of whether you need the telephone package.

In fairness to NTL, this restriction is clearly advertised on the digital tv homepage and is not hidden.

This thread, therefore, is to discuss whether NTL are right to impose this restriction on customers who only want a television service and do not require a telephone provided by NTL, for example mobile phone users who don't want a landline, or customers of other telephone companies, such as BT, etc...

OK, that sets the scene.... drivers, start your engines!

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My viewpoint on this is that NTL are wrong to do this. There are no technical reasons as to why the NTL telephone line would be a pre-requisite to being able to receive digital TV from NTL, so this is just NTL abusing their position as a cable television provider.

I made the comment in the 'other' thread that NTL are using restrictive trade practices by forcing this on customers, and pointed out that other industries are prevented from doing this, ie mortgage providers can not force you to take their insurance, printer manufacturers can not invalidate your warranty because you used another vendor's cartridges, etc...

One comment made was that 'As there is no charge if you don't use it and no set up charge it's a transparent cost. You get a box on the wall to use or not at your choice.' I'd disagree with this, because the line rental is not free so you are paying for this service whether you use it or not.

Just for the record, I used to have broadband, phone and tv from NTL. I dropped the phone and tv packages (cause they're tied-in to each other, I couldn't just drop the phone even if I wanted to), but have kept broadband.

Anyone else care to comment. Anyone else think this is fair, after all 'the bundled cost is irrelevant as it can't be unbundled'. Anyone else agree that 'There's nothing [for the Fair Trade Commission] to investiagte. ntl own their network and can do with it as they see fit.'

I'd rather this be a proper discussion than a slanging match (we can do that via PM if necessary ).

[Neil]

It might help if you posted this in the right forum.

I'll move it now.....

[Gareth]

Sorry... I thought that as it covers both phone and tv it would be suited in the general section... plus, it's more to do with NTL's policy, not the service.

But, it's your call.

[Neil]

Originally Posted by Gareth

ntl own their network and can do with it as they see fit.'

Not much else to say really.

[Edit]-There is always an alternative in Sky/BT.

[ian@huth]

As I said in the other thread, NTL do not make enough profit from TV on its own to be able to offer the same price as Sky for comparable packages and give free installation. Even if a customer had TV for the full 12 months of their contract it would still be loss making for the company. It is a very difficult situation for NTL as if they levied an installation charge for customers just wanting TV on its own it would probably drive those customers to Sky with its free digibox and installation.

[altis]

This all comes about because of the position of Sky. Not only do they distribute the channels by satellite but they make (or commision) the content.

NTL would simply not be able to offer a TV package without the Sky channels. Sky know this and can charge them arms and legs to be able to do so. In order to make a normal profit, NTL would have to charge more than Sky do for their package. But they can't 'cos no one would buy it. Ergo, NTL only make a small profit on the TV package.

They have to get their money somehow and can make a larger margin on the telephone service. So, the two are tied together.

IMHO, the only way to sort this out is for legislation to force Sky to split into two halves - content and distribution. And I don't think that's likely in the near future.

[SMHarman]

The alternate Sky, requires a sat attached to the side of your property, not always allowed, possible or desired, even when this is possible the asthetics of some high occupancy tower blocks with sat dishes all in a row / hanging off each balcony are something the competition should be ashamed of.

So NTL, why tie. I'm very anti this, being as I have had BT ADSL (up until recently), a pre broadband decision and then for other reasons, this has tied my voice / voice data to BT as NTL do not offer residential ADSL, yet despite not being able to offer me the BT product they state their product is a proxy for I had to pay for their phone line.

Others have had problems with not all services being available on their line (CLI being the most visible one), again forcing people to an inferior product.

The gripe I had most with on this, is despite not ever using the line and having nothing plugged into the line I have had bills with call charges on them and NTL have accused me of making these calls (perhaps your 2 year old unplugged a phone from another socket, plugged it into ours and then started calling people - Hmm, in a room where he is not allowed to go, where your phone socket is behind a sofa that takes 2 adults to move - I don't think so).

The cross-subsidy issue (phone subsidising DTV) is an interesting point. Is that still the case if the line is not used - I guess so as it is an extra £130/yr in the bank and no need to support it at all. At the moment Sky is free install and free box? Why is DTV not profitable? Can DTV not be seen as a way to get cable into peoples houses and sell BB / Telco on top.

So a bad thing IMHO as I have paid NTL about £500 more than I needed to because of the DTV/Telco thingy.

At the moment though I am on the free phone line for a year package so placated, I guess I will speak to retentions in another 7 months time.

[Gareth]

Originally Posted by Neil

Not much else to say really.

[Edit]-There is always an alternative in Sky/BT.

Admittedly they own their network, but does that make it right to enforce an unfair charge on customers who want to use that network? I would argue that just because it's their own network, that doesn't put them outside the jurisdiction of the Office of Fair Trading, and that NTL are currently applying anti-competitive trade principles.

ian@huth, you made some good points. I think you're right that if they levied the installation charge they would lose a lot of customers to Sky's free installation package. So the mandatory phone line rental is really a cover-up to hide the installation fee that NTL don't charge - is that what you're saying? Any thoughts on how Sky can afford to offer free installation yet NTL can't? Surely getting satellites up into space is just as costly as digging up a few roads to put some cables underground?

altis, that's an interesting perspective that I hadn't considered. I hadn't thought of the content & distribution sides of Sky before. I'm afraid I don't know enough about Sky's position to comment on whether such legislation is gonna happen (not that I know much about NTL either, but it's not stopping me from getting on my soapbox ).

So, am I wrong in thinking that NTL are wrong - is it really Sky who are to blame?

[Chrysalis]

its called subsidising, people who dont use the phone are subsidising other parts of the service. NTL could have allowed a tv no phone package but it would be charged more then the £11 you quoted.

They could perhaps do something like this.

Base TV £13.50 a month install fee £50 min contract 12 months.
or
Base + Phone £21.50 a month free install min contract 12 months.
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Originally Posted by Neil

Not much else to say really.

[Edit]-There is always an alternative in Sky/BT.

hate to say it but there isnt 'always' that alternative for some people.

[Neil]

Originally Posted by Gareth

Admittedly they own their network, but does that make it right to enforce an unfair charge on customers who want to use that network? I would argue that just because it's their own network, that doesn't put them outside the jurisdiction of the Office of Fair Trading, and that NTL are currently applying anti-competitive trade principles.

Surely it could only be 'anti-competitive' if there was no alternative whatsoever, & to answer Chrysalis's point above, there is always an alternative-if you don't want ntl's phone line, & can't have/don't want Sky, then you always have the choice of not having DTV-it's not really the end of the world is it?

[Angua]

As I understand things you must have a telephone to have sky. Thus sky are forcing you to have a landline whether you want one or not. With services such as Talk Talk is this fair either?

[ian@huth]

Originally Posted by Gareth

ian@huth, you made some good points. I think you're right that if they levied the installation charge they would lose a lot of customers to Sky's free installation package. So the mandatory phone line rental is really a cover-up to hide the installation fee that NTL don't charge - is that what you're saying? Any thoughts on how Sky can afford to offer free installation yet NTL can't? Surely getting satellites up into space is just as costly as digging up a few roads to put some cables underground?

Both Sky and NTL have had massive costs involved in setting up their networks. NTL costs mainly centred around digging up roads, Sky in putting up satellites. Actually Sky do not put up satellites but rent transponder space on them but that means that Sky realistically have to pay for the satellite, getting it into orbit, maintaining it and giving the owners a profit.

The main difference in customer installation is that Sky have to install and align a dish together with cabling from the dish to the digibox whilst NTL have to run a cable from the nearest green box to a connection box on the property and then cable from this box to the STB. Not a massive difference in costs between the two.

Sky gives out free digiboxes which are free due to the subsidy from Marketing Contributions Limited for rights to the interactive services. Maintenance of the digibox is only free for the first twelve months after which the customer bears the cost (unless the customer is an adept negotiator ). NTL have to pay for the STB's and continuing maintenance after the initial 12 month contract period. It is therefore costing NTL much more than Sky to provide the DTV service.

Sky then make money out of all their subscribers and also out of NTL subscribers who are taking Sky channels via cable.
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Originally Posted by Angua

As I understand things you must have a telephone to have sky. Thus sky are forcing you to have a landline whether you want one or not. With services such as Talk Talk is this fair either?

You only need a telephone line if you are taking advantage of the free digibox subsidised by Marketing Contributions Limited, and then only for the first 12 months. You also need the phone line if you take advantage of the multi-room discount. It doesn't matter who supplies the phone line where it is required.

[mrlipring]

Originally Posted by Angua

As I understand things you must have a telephone to have sky. Thus sky are forcing you to have a landline whether you want one or not. With services such as Talk Talk is this fair either?

incorrect. It used to be that you needed it connected to a landline for a year to get the subsidised installation etc.

Nowadays, you can pay a 25 quid one-off charge and you don't need a phone line. You will, of course, have to call up sky if you wanna watch any ppv etc, and interactive stuff won't work.

[orangebird]

Originally Posted by Neil

Surely it could only be 'anti-competitive' if there was no alternative whatsoever, & to answer Chrysalis's point above, there is always an alternative-if you don't want ntl's phone line, & can't have/don't want Sky, then you always have the choice of not having DTV-it's not really the end of the world is it?

ntl have been offering that bundled service for years, and people have also complained about it for years too. If it were anti-competitive, ntl would've been brought to task by now.

[Shaun]

When I (stupidly) gave Ntl their second (and final) chance to prove themselves to me by providing a decent service they offered the phone line rental free for 12 months. Even when I told them I had no intention of using the phone line they still insisted in installing it with the TV. how does that make financial sense? The install still had to be paid for even thought they we're going to make no money on it. Overall that makes a loss on the service - What's the point in that?

Suffice to say the cocked up my account and couldn't activate my smart card (it was when they had all the provisioning problems last year) so I gave them the boot but still cant fathom the decision to force a loss making phone line on me.