New research from Altnet Community Fibre has found that 17% of British customers are struggling to pay broadband bills.
With households still recovering from the financial effects of Covid 19, and now faced with the stress of having to deal with rising costs for essential commodities, Community Fibre’s study found that 33% of households would rather shiver in the cold than lose their broadband connection.
Graeme Oxby, CEO of Community Fibre, emphasised that broadband is no longer a luxury: “Entertainment aside, the online world has grown to be crucial for work, education, access to medical care, and checking up on loved ones.” His firm found that 20% of Brits cannot afford even basic broadband bills, disadvantaging them when it came to everyday tasks such as accessing public services, banking and applying for jobs. Thirteen per cent of respondents said their children are often unable to do schoolwork online due to problems with broadband affordability.
Oxby paints a worrying picture. The government and the industry is spending billions on new full-fibre networks, which for many are only aspirational as they cannot afford their current bills.
The study of 1,500 adults found that:
• 17% of Brits regularly struggle to keep up with their broadband payments
• 18% admit they usually run out of data before the end of the month
• 29% will have no choice but to cut back on data to save money
• 21% regularly rely on friends or neighbours to access the internet
• 12% say they are concerned they come across as unprofessional when working from home, as their WiFi connection is so poor
• 28% admit that lack of internet access has meant they have struggled to make a GP appointment, apply for a job, access government services or pay bills.
The research by Community Fibre raises an uncomfortable issue. Having spent billions on new fibre networks, broadband operators naturally expect a return on that investment. But if they hike prices too far then broadband will become increasingly unaffordable – making the gigabit dream a nightmare for some. Ironically, net neutrality was about creating a level playing field but money always talks the loudest and here we see a two-speed internet developing before our eyes.
The risk is a widening of the digital divide and a worsening of social isolation for the poorest. Nowhere is this more apparent than in London where rich and poor live cheek by jowl.
Omnisperience doesn’t believe social tariffs are the answer, because they only help specific limited groups, have poor uptake and stigma attached to them and, crucially, require people to jump through hoops to get them.
There is a win-win here though. If ISPs take a longer term view and spread their profit expectations over a longer period, they can maximise affordability and include as many as possible. Digital access will, in turn, build digital skills and lead to customers who can take better paid jobs – creating a virtuous circle. But ISPs should also explore new charging models (such as sponsorship and ad-supported) and new initiatives such as The Good Things National Databank. It is ironic that the government is prepared to subsidise physical build but does not have a strategy around affordability once networks are available.
As for Community Fibre itself, it prefers to call its low-cost offering Essential broadband and rather than requiring customers to prove they are entitled, it makes it available to all customers – no questions asked. This is a step in the right direction, but we’d like to see the QoS Community Fibre offers on the Essentials package boosted to an adequate level – say 30Mbit/s – as there is little a household can do with 10Mbit/s. Its full fibre offer for 500Mbit/s is very competitive though at £27 per month and crucially this is a synchronous service – compare this to rivals who charge more but whose upload speeds range from 36-73Mbit/s. Those faster upload speeds are critical for homeworkers, and for some customers will be the key differentiator rather than price.