ikr2 wrote on Nov 11^th, 2010 at 9:03pm:

In answer to the direct question - if it is alleged, then one must assume that the author is not a liar. I do not however know of any case - certainly none of the providers listed above include them. Ignore Virginmedia "Talk Anywhere"; that is a prepay bundle purely for high cost calls, not an "unlimited" call plan package.

There is a very serious schoolboy error in the first part of the statement. The word "maximum" should be "minimum" and it assumes consideration of calls having a near infinite duration where the effect of the call setup fee has become insignificant. A one minute call costs 16p per minute, a two minute call 10.5p per minute  etc. approaching 5p per minute as the duration approaches infinity. Students may like to calculate how the pence per minute rate falls below 5.1 at 1 hour 50 minutes and 59 seconds. Someone awarded a detention could be given the task of working out when it reaches 5p per minute!

I am sure that the Head of Mathematics could explain this to the editor of the school newsletter. The Head of History could advise that the distinction between rates for local and national calls disappeared from residential call charges in 2004 and the BT rate for a non-inclusive geographic call has not been 4p per minute since 30 November 2008. At that time the setup fee was 7p and there have been 7 price revisions since then, with the next to come on 3 January 2011. (If the school newsletter is a biennial publication, then it is just possible that the latest edition is accurate.)

The Head of Home Economics will point out that if BT customers were to call before 7am or after 7pm their local calls would almost certainly be free, whereas the cost of a call to a 0844 number is the same at all times. They would also advise that if calls are regularly made during weekday daytimes, it is probably most unwise not to subscribe to the Unlimited Anytime Call Plan.

The phrase "other providers may vary" is a classic piece of marketing newspeak - a topic to interest the Head of English. What it should say is that no other provider is prohibited by regulation from making money from its rates for these calls. Those who offer calling services to those with BT lines may mirror BT charges, but no other sane provider would fail to make a proper margin where it was allowed to do so.

The implication that parents are paying 1p per minute towards the cost of the service is grossly misleading. Their telephone company is paying around 4.5p per minute and would be expected to pass this on both directly and by the exclusion of these calls from reduced rate or inclusive deals. If the "premium only" BT rate of 5p per minute were set against the correct (current) "penalty rate" of 6.4p per minute for those who call outside the terms of their BT call plan, then the fact that apples were being compared with bananas would become obvious, as the school is not paying the parent 1.4p per minute for calling.

The fact that BT rates for 084 numbers are regulated and that it offers ordinary calls through call plans to cover the periods when the phone is used, applying penalty rates at other times, makes BT rates totally unsuitable for use as an example.

When the quotes come in from NEG for a purely geographic number, the extent of the subsidy being derived from callers will become apparent. If technical issues cloud that matter, ensure that a true like-for-like quote for a 03 number is obtained.

I hope the OP and others are now able to understand the issues having had them addressed in two separate ways.


I will add just three comments to qualify and extend Dave's excellent contribution, made in a perhaps necessary attempt to clarify my contribution.

* The "call setup fee" (or "connection charge", the terms vary) must be seen as an inherent part of the "call cost", not some additional charge that need not be mentioned. It is not possible to express the cost of a telephone call from a landline as a flat rate per minute. No landline call provider has any such tariff.

** The offering of residential telephone service from BT and others is based on the concept of a Call Plan, with calls to "ordinary" numbers (of up to one hour) included during the time when the telephone is used. It is wrong to think of the "Unlimited Anytime" Plan as some chargeable extra service (perhaps for heavy users); it is the plan which all those who make calls at any time (i.e. not only during the evening and weekend) should select.

*** It is wrong to describe the "penalty charge" applied to those who make otherwise inclusive calls outside the terms of their Call Plan as "standard". The standard charge for a call to a geographic (or 03) number, under the terms of a contract for normal domestic landline or mobile telephone service, is ZERO.


I applaud Dave's attempt to find a suitable analogy. Unfortunately the complexity of telephone tariffs, with the largest call provider being wholly atypical due to the effect of regulation and therefore unsuitable for use as an example, is unequalled in our common experience. Given the possibilities for a complex situation to be misrepresented (as must be the case with any attempt to present simple clear information about costs) there is no analogy that is fair and truly equivalent.

Ofcom will shortly be publishing a consultation on proposals to revise the regulatory structure. Let us hope that once such proposals have been implemented the situation will become clearer.