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Big Kahuna Broadband: Virgin Media UK’s New Cable Broadband Packages Make North Americans Drool

big kahunaIn North America, the best prices, rebates and packages are only available to new customers while customer loyalty is rewarded with rate hikes.

In the United Kingdom, Virgin Media handles things differently, offering its best new packages and deals first to current customers before they become available to the public at large.

This week, the cable operator introduced two discounted “quad-play” bundles of broadband, mobile, television, and home phone service at prices that are unbelievably low by North American standards.

  • The $59.40 Big Bang bundle provides 100Mbps broadband, a Virgin Media TiVo, home phone service, and Virgin Mobile service with unlimited talk/text and 250MB of data;
  • The $84.88 Big Kahuna delivers 152Mbps broadband, a Virgin Media TiVo with a 230 TV channel package, home phone service, and Virgin Mobile service with unlimited talk/text and 250MB of data.

“Our fantastic new bundles deliver unprecedented value as standard,” said Dana Strong, chief operating officer of Virgin Media. “For the first time, households will be able to get the best broadband together with the UK’s best value mobile SIM, as part of a bundle perfectly tailored to the customer’s needs.”

Virgin Media will introduce other packages in the near future and is resetting its standard broadband speed offering to 50Mbps. Customers with 30Mbps will be upgraded to 50Mbps, 60Mbps customers will soon get 100Mbps, and 120Mbps customers will be boosted to 152Mbps — all at no additional charge.

The new bundles come with an 18-month contract and do not include the usual BT line rental charge for telephone service that most landline customers in Britain already pay, regardless of provider, which costs an extra $27.15 a month.

Customers who don’t want mobile service with Virgin will be given a further discount, as the price chart below shows:

Virgin Media bundle deal Price Line Rental Total Monthly Price
Virgin Media Big Bang – 100Mbps broadband, Virgin Media TiVo, home phone $50.92/month $27.15/month $78.07/month
Virgin Media Big Bang – 100Mbps broadband, Virgin Media TiVo, home phone, Virgin mobile SIM-only $59.40/month $27.15/month $86.55/month
Virgin Media Big Kahuna – 152Mbps broadband, Virgin Media TiVo, home phone $76.38/month $27.15/month $103.53/month
Virgin Media Big Kahuna – 152Mbps broadband, Virgin Media TiVo, home phone, Virgin mobile SIM-only $84.88/month $27.15/month $112.03/month

Virgin Media’s New Speed Throttle Spreadsheet = Bait and Switch Broadband

virgin saltStop the Cap! has hammered ISPs for a long time for promising “unlimited” broadband but sneaking in “traffic management speed throttles” they call a matter of fairness and we call deceptive marketing.

Virgin Media’s UK broadband customers have just been introduced to the extreme absurdity of selling “insanely fast” fiber broadband that comes with a sneaky spreadsheet guaranteed to confuse all but the most observant byte counters.

Some customers suspect Virgin Media is just retaliating for repeated findings from British regulators that the company runs dodgy advertising that promises one thing and delivers something entirely different in the fine print. More than two dozen of their TV commercials and print advertisements have been banned for deceptive ad claims, ranging from the “fastest broadband in Britain” (not exactly) to promotions promising “free service” that actually costs around £15 a month (what is a dozen quid or so among friends).

So why does Virgin Media need traffic management? They have oversold the service to too many customers and won’t invest enough in upgrades to keep up with demand.

Network overselling is more common that you might think. ISPs understand that all of their customers will not be online at the same time, so there is only a need to provision enough bandwidth to support their assumptions about anticipated usage. If your ISP serves a gated Luddite community, it won’t need the same data pipe required to provide access along University Row. The trick is to use real science and math to correctly anticipate user demand, but many ISPs answer first to their investors, who simply hate spending good money on upgrades. Expansion proposals are about as popular as North Korea’s Kim Jong-un. The result is “good enough” broadband service that is susceptible to overcrowding during prime usage times.

You already know what happens next. Once the kids are home from school and dinner is finished, your online experience quickly s l  o   w    s     t    o     (buffering).

In Britain, some ISPs are notorious for overselling broadband service that advertises speeds in the dozens of megabits, but can’t even break 1Mbps during peak usage times.

How can this be fixed? With investment in upgrades. What do ISPs do instead? They slap on usage caps and “network management” speed throttles that artificially slow browsing speeds for those considered “heavy users.”

Virgin Media was supposed to be a breath of fresh air from usage caps. Instead, the company promises a truly unlimited experience, with limitations.

Virgin’s latest iteration of its “peak time usage policy” resembles a tax table from the Internal Revenue Service. Can you understand it?


Despite this, Virgin calls its broadband service “to all intents and purposes, completely unlimited.”

Where is that British regulator, again?

The company claims less than 3% of its customers will ever be affected by these limits. They might be right if customers avoid online video, downloading large files or games, cloud storage, or allowing other family members to use their connection at the same time. If one is subjected to the speed throttles, Virgin will take away nearly half of the speed customers were sold.

Here is Virgin’s position on all this:

“Our 100Mb customers receive speeds up to 104.6Mb, proven by Ofcom, and even if you’re one of the 2.3 per cent of heavy users we sometimes, temporarily traffic manage you’ll be receiving speeds of around 60Mb — so you can download and stream as much as you like.Today’s update makes it more flexible and responsive to how people are using our services and is designed to reduce the time customers may spend in traffic management, it could be just one hour. We do not have caps, nor do we charge customers more.”

That is true, but Virgin is charging a premium for broadband service speeds they are prepared to automatically take away when a customer persists in using the service they paid to receive.

Virgin could pay their experts to conjure up speed management charts like the one above, or they could invest in network upgrades that make such network management techniques unnecessary.

British Regulator Tells Virgin Media to Stop Calling Limited Broadband “Unlimited”

UntitledVirgin Media is in hot water with a UK advertising regulator after the company’s marketing department borrowed one of the tricks successfully employed in the United States: selling “unlimited broadband” service that actually is not unlimited at all.

Competitors BSkyB and BT jointly complained to the Advertising Standards Authority about misleading ad claims from Virgin Media that promise unlimited broadband, without bothering to clearly mention Virgin uses a “traffic management policy” that slashes speeds in half when a customer downloads more than 11GB during peak usage times.

Virgin defended its advertising, claiming its speed throttle is so infrequently activated that 97.7% of its customers would never encounter it.

But the ASA would have none of that, noting Virgin’s advertising campaign specifically targets customers who lust for faster speed and are engaged in bandwidth intensive activities.

The ad claim

The ad claim: “The faster your broadband speed, the more you’ll be able to do online. So, if there are a few of you at home gaming, downloading, streaming movies and shopping, then mega speeds of up to 100Mbps will let you all do your thing without slowing each other down.”

The tiny fine print.

The tiny fine print.


virgin salt“In that context we considered that the restriction of reducing users’ download speeds by 50% was not moderate and that any reference to it was likely to contradict, rather than clarify, the claims that the service was ‘unlimited’,” the ASA said. “We therefore concluded that the claim ‘unlimited’ was misleading.”

A Virgin spokesperson explained the “unlimited” in the advertising actually referred to one’s ability to use their account as often as they like without worrying about overlimit fees.

“Unlike BT or Sky, all Virgin Media customers can download as much as they like, safe in the knowledge we’ll never charge them more.”

The ASA itself is not militant adhering to the dictionary definition of “unlimited” either.

The ASA, which previously banned more than two dozen Virgin ads for stretching the truth, ruled this one misleading as well because Virgin Media crossed the line imposing restrictions “that were more than moderate:”

While the claim “no hidden charges” made clear that users would not be charged for downloading or browsing, we considered that the inclusion of the claims “unlimited” and “no caps” implied that there were no other restrictions to the service, regardless of how much data users downloaded and browsed. Virgin Media’s traffic management policy reduced users’ download speeds by 50% if they exceeded certain data thresholds and we considered that this was an immoderate restriction to the advertised “unlimited” service. We therefore concluded that the claim “Unlimited downloads Download and browse as much as you like with no caps and no hidden charges” misleadingly implied that there were no provider-imposed restrictions on a customer’s ability to download data.

“The problem is that the service claims to be unlimited but is too limited,” comments Stop the Cap! reader James, who almost thought this was an April Fools’ prank. “A little limited would be just fine. So if you claim your service is unlimited, consumers should expect it be subject to moderate limitations?”

Virgin has since slightly relaxed its speed throttle; violators now face a 40% speed cut when they are found to be downloading “too much” during peak usage periods.

For UK broadband users, the larger question is why the ASA simply didn’t reach for the dictionary when attempting to define “unlimited.”

“If a broadband provider wants to advertise unlimited service, they should simply offer it,” says Stop the Cap! reader Geoff Peale. “Calling it unlimited while interfering with your speed is nothing short of trickery, and the ASA should know better.”

http://www.phillipdampier.com/video/BBC News Twenty five Virgin Media ads found to be misleading 10-11-12.flv

The Advertising Standards Authority (ASA) has banned 25 Virgin Media adverts for being either misleading or factually incorrect in the past 18 months. The BBC’s Watchdog took a humorous look at them to find out why so many are falling afoul of the regulator. (6 minutes)

Thanks to readers James and Geoff for sharing the story.

Cable’s ‘Darth Vader’ is Back: John Malone’s Liberty Global Buys Virgin Media for $16.3 Billion



Dr. John Malone is a force to be reckoned with and the British are about to get an introduction with this morning’s announcement Liberty Global has acquired Virgin Media in a blockbuster $16.3 billion acquisition deal that will make Malone and Liberty one of the biggest broadband providers in the world. (The deal is valued at $23.3 billion after Liberty agrees to take on Virgin Media’s existing debts.)

Malone will take control of Britain’s largest cable operator and will now also control another 18 million broadband customers in Europe, particularly in Germany and Belgium. His biggest rival will be News Corp.’s Rupert Murdoch who controls BSkyB, Britain’s largest multichannel provider.

Malone’s reputation for ruthlessness precedes him. In the early 1990s, then Sen. Al Gore, Jr., called Malone the Darth Vader of the cable industry. Gore also referred to Malone as the head of a mafia-like “cable industry Cosa Nostra” best known for customer abuse, cold-hearted mergers and acquisitions, and endless rate increases. In the 1980s and 1990s, Malone appeared regularly at congressional hearings to discuss cable industry abuses. At the time, Malone was CEO of America’s largest cable operator Tele-Communications, Inc. (TCI). Today, most of those cable systems are known by another name — Comcast.

In the late 1980s, TCI got the ball rolling on massive rate increases for basic cable service. Other operators quickly followed. As rates exploded upwards, the phones began ringing in Washington from outraged constituents. Gore recounted several recent rate hikes in his own home state of Tennessee in one hearing:

  • In three years, rates increased 71% in Memphis,
  • 99% in Crossville,
  • 113% in Nashville,
  • 115% in Chattanooga,
  • and 116% in Knoxville.

Liberty Global logo 2012Under Malone’s leadership, TCI Cable raised rates 60 percent in 1992 alone, helping drive the enactment of the 1992 Cable Act which began to slow the pace of rate hikes. The bill was vetoed by then President George H.W. Bush but overridden in Congress after tens of thousands of constituent complaints poured into Washington. It was sweet justice for many elected officials who were on the receiving end of Malone’s hardball tactics for nearly 20 years. Malone was well known for retaliating against local officials who opposed his unfettered rate increases by suddenly cutting off service to customers and putting up on-screen messages in the place of favorite channels with the names and phone numbers of elected officials Malone claimed were responsible.

Under Malone’s leadership, city officials and consultants working to bring a competing cable operator into Jefferson City, Mo., got a taste of TCI’s ruthlessness when Paul Alden, TCI’s vice president and national director of franchising personally threatened the mayor and a consultant working on the project.

“We know where you live, where your office is and who you owe money to. We are having your house watched and we are going to use this information to destroy you. You made a big mistake messing with TCI. We are the largest cable company around. We are going to see that you are ruined professionally.” Alden warned.

TCI later also claimed it had a First Amendment right to provide service wherever it wanted, with or without a cable franchise. It also threatened any would-be competitor with ruin. In Jefferson City, that would-be competitor eventually won $35 million in damages in a jury trial over TCI’s tactics.

Virgin Media is doubling customer broadband speeds... for free.

Malone has made no secret he believes government officials are simply getting in his way. In 1999, The Guardian noted Malone is a big believer in telecom oligopolies:

He is scathing about regulatory attempts to prevent monopolies and mergers. Governments, he says, are “antediluvian” in their approach to the emerging new world economic order. Instead of trying to prevent mergers and collusion between media and communications companies, Malone says governments should actually promote the creation of “super-corporations” (such as his own) with enough capital to exploit the potential of new technology.

Malone has plenty of money to throw around. He engineered the sale of TCI Cable to AT&T and personally earned billions from the transaction. Three years later, AT&T sold those systems to Comcast.

Liberty Global has stayed on the sidelines of the cable business domestically, preferring to invest in cable networks and programming. Malone’s firm owns Starz!, which gave Netflix considerable trouble when the online video service lost the rights to a large number of recent movie titles. Netflix had negotiated a $30 million yearly deal with Liberty in 2008 which expired in early 2012. Renewal talks fell through when Liberty demanded $200 million annually to let Netflix keep streaming its movies.

Consumers in the United Kingdom may experience Dr. Malone’s idea of finesse soon enough, if shareholders and British regulators approve the buyout deal.

http://www.phillipdampier.com/video/BBC News Liberty Global to buy Virgin Media for 23bn 2-6-13.flv

BBC News reports the blockbuster deal will pit Dr. John Malone against his biggest rival, Rupert Murdoch. Virgin has five million customers in the UK and provides the country’s fastest broadband service. (2 minutes)

Virgin Media Doubling Broadband Speeds for Free While Competitor Sky Unveils 100Gbps Internet for UK

Virgin Media is doubling customer broadband speeds... for free.

Great Britain is leapfrogging ahead in the global broadband speed race with two announcements this morning that represent major advances in British broadband.

First, Virgin Media is announcing it will double the broadband speeds for four million of its customers starting next month, for free.

The company says it will be the first residential provider in the United Kingdom offering 120Mbps broadband — a 20Mbps speed increase for their existing 100Mbps clients.  Customers on Virgin’s 10, 30, and 50Mbps tiers will soon receive free upgrades to 20, 60, and 100Mbps, respectively.  Those on the company’s popular 20Mbps plan will have their speeds tripled to 60Mbps.

That’s a major advancement for British broadband, where dominant BT-provided DSL runs at speeds averaging just over 6Mbps.

The new speeds were made possible by “modest investments” in Virgin’s fiber network, according to Virgin Media CEO Neil Berkett.

Berkett said the new speeds would help meet growing demand for faster access to support the proliferation of new digital devices.  Because Virgin invested primarily in fiber and cable broadband, speed upgrades on their existing infrastructure come “at a fraction of the cost of other network operators.”

That understanding was not lost on Sky Broadband, a growing competitor in the United Kingdom.  Sky this morning announced it has launched a newly-upgraded 100Gbps optical network to support its 3 million broadband customers.  The company is spending several hundred million British pounds on updating its network to position itself to become Britain’s largest Internet Service Provider.

Sky’s new network is based on the latest Alcatel-Lucent fiber technology, capable of supporting 100Gbps speeds on each of the individual 88 wavelengths on a single optical fiber.  Sky deployed the new dense wavelength division multiplexing technology on its existing optical fiber backbone network, demonstrating the infinite upgrade possibilities fiber optic technology offers.

Sky pitches its network capacity to consumers as a key benefit of its service, noting it is free of “traffic management” policies that reduce speeds for customers of other Internet providers.

The upgrade arrives just in time to handle the expected explosion of online traffic with this week’s introduction of Netflix streaming across Great Britain.

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  • Steve: Albany, NY area. Triple play, 15/1 Mbps internet, no premium channels, one DVR box and two regular boxes. Used the Twitter method for the 3rd year i...
  • Stacy: I am cancelling my service with Suddenlink due to the data cap. I am willing to accept the sacrifice of lower internet speeds to ensure none of my har...
  • karen: I agree with everyone here: it shouldn't be legal. And I guess when viewership numbers drop significantly, or when advertising dollars drop, cable co...
  • GBlljhgfvbffg5365: This. The Full Price needs to be disclosed before you even sign up. Quite often I've found is that their is a $50+ Difference in the price they advert...
  • Allen P.: Terrible Internet speeds and the worst customer service. Unfortunately they are the only provider for my area. I would get rid of them if I could....
  • Jason: I am curious if the 50Mbps speed as the fastest they ever achieved if that was wired or wireless? What environment are they in? An apartment or a sing...
  • Angel: it should read "I’m NOW paying 4$ less than the original promo I bought last year". and you actually have to get to the cancellation department, the p...
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