Orange to charge fat pipe waverers

Orange has become the first broadband provider to charge users for switching to another supplier.

The mobile operator and ISP will introduce a charge of £12 in December for customers who ask more than once for a MAC code. Customers need the code in order to move broadband suppliers without disruption to their service.

Orange will initially release a MAC for free but if a customer asks again it will charge £12 for every additional request. A MAC expires after 30 days, meaning that if a customer does not choose a new supplier within that time, they will be hit by the extra charge.

Orange said the charge is being levied to cover administrative costs. It said i a statement: "This is not intended to penalise our customers but follows the practice by other broadband companies of offering a service to customers which they cannot deliver on. This then generates multiple unnecessary requests for MAC codes which has both an administrative and financial impact on Orange as a business."

The veiled reference to other ISPs is likely to be aimed at Carphone Warehouse, whose customers have experienced lengthy delays in trying to migrate away from the company.

Consumer groups were angered by Orange's charge. Steve Weller, head of communications services at price-comparison website uSwitch, said: "It seems ludicrous that given the current low levels of satisfaction, companies are penalising customers for switching to a better deal. It smacks of anti-competitive behaviour."

The charge - which applies to all of Orange's broadband users - is in addition to any contract termination fees customers might incur. Assuming just two per cent of its customers make a chargeable MAC request each month, Orange would make an extra £3m in revenue every year. The company says it does not plan to extend the MAC charge to its mobile phone customers.

uSwitch has called on Ofcom, the regulator, to introduce MACs as soon as a customer signs up to an ISP. Such a move would reduce the need to wait - or pay a charge - if a customer wants to leave. The practice has already been adopted by energy suppliers. Ofcom was unavailable for comment on the proposal at the time of writing.

BT is to introduce a charge of £33.75 in the spring for ISPs that do not release MACs to their customers.

Richard Thurston writes for ZDNet UK