SWGfL charges for not renewing broadband contract?

[kennysarmy]

So with 8 months to go until our contract with the SWGfL expires I thought I'd start the ball rolling into looking at alternative broadband provision.

 

I ping off an email to SWGfL advising that we may not renew and as I know they like a 6 months notice period could I have their pricing if we want to renew - clearly it makes sense to get that ahead of the notice period - right?

 

This was their response!!

 

I have contacted our suppliers over the last week to see if we can supply a ‘new term’ pricing now or if we need to wait a couple more months for this. I’ve been given in term pricing quite easily but it has been identified that we are a little early to be requesting refreshed new term prices. You can maintain the same pricing beyond your contract ‘expiry’ however the way Fibre zones work sometimes sees a beneficial price change making it worth looking into a new term. I would need to look to request the price refresh in January/February to have the supplier see it as an upgrade away from your current term (to negotiate around the system). I’ll set a task to contact you in the new year regarding this if you like and develop a proposal if this acceptable and we can discuss routes forward?

 

In terms of notice periods: We prefer 180 days’ notice to cease a SWGfL service however we will accept 90 days’ notice but this increases the cessation charge to include a lost income charge. Even if more than 180 days’ notice were given, a cessation charge would still apply. The cessation charge is an administration fee to assist with the shutting down of your whole service. Notice needs to be given in writing to us for each site that wishes to cease. You can provide this as one email with each site listed if you prefer.

 

As detailed in our Terms Clarifications Document:

 

· Lost income charges. If you provide less than 180 days (six months) notice then, regardless of whether your contract is still within the initial term or has gone beyond that date, our suppliers are able to charge for lost income as a result, which we then pass onto you. This is usually less than £140, but can be more. This is a feature that is not uncommon in large contracts based on the OGC model, as ours is.

 

· Cessation charges. There are charges associated with the cessation of the service provided. Because it’s a service, not just a connection, there are various actions required and work on systems to elegantly and securely discontinue your service, which do carry costs. This is usually less than £250, but can be more. These are payable even when six months notice is given and regardless of whether the contract is terminated before or after the initial term.

 

SWGfL - Schools Internet Service, Terms of Service

 

 

For 90 days’ notice the cessation charge is £330 per site inclusive of the lost income charges.

 

For 180 days notice (or greater) the cessation charge is £220 per sites.

 

 

Now I'm no lawyer but is it really possible to sign up for a 3 year service, give 6 months notice that we don't want to renew and STILL have to pay charges???

 

Out of principle it just makes me want to move to another supplier.

[Steve21]

Most have similar in their contracts somewhere, as a lot of it is supplied by another company, e.g. it's not SWGFL lines.

 

Same as photocopier leases etc when the lease company passes on collection charges blah blah.

 

Might be different if it's someone like Virgin who use their own lines

 

Steve

[Wave9_Lee]

No, this is not usual in my opinion. A Cessation fee is often payable when a contract is terminated WITHIN its initial term, as you have signed a contract for a fixed period. This can sometimes include set up costs that have been incurred by your supplier that are amortised over the term, or discounts that have been achieved as a result of a term commitment, so in my view, are fair. If you are outside your initial term, in my view its not usual to incur additional charges. The cost of 'detaching' you from the service should be built into their charges from the outset, not sprung on you as a gotcha at the end. It can sometimes be the case that there is a charge to migrate you to a new service, as there is additional work required, but not to simply terminate. It's the suppliers job to entice you to stay by making sure you are pleased with the service or price (ideally both). We wouldn't look to punish customers for not renewing - we would see that as our​ fault.

 

Having said that, if it's in your contract, there's not a lot you can do but ask nicely.

[Boredguy]

The cancellation charge is in our contract alas, and it took me a while to find out what the value was so I could factor it in, and I really should see about getting the quotes renewed in the new year ready for the 6 month window.

[Steve21]

The cost of 'detaching' you from the service should be built into their charges from the outset, not sprung on you as a gotcha at the end.

 

That's kind of counter-logic though. Why would you want to pay an additional £250~ per 3 years if you don't cancel it? If you can pay a one off at the end?

 

You could have 30 years of service and pay £2.5k for nothing (random example)

 

 

An example from Virgin Business:

 

c)

our reasonable costs of removing, storing and decommissioning service equipment or any other equipment (unless we agree otherwise);

 

Steve

[SchoolsBroadband]

Well this seems mad to me.

 

If a customer cancels their contract or asks to cancel at the expiry of the term then there's no cease fee at all. Not for adsl, fttc or leased line.

 

We incur a small charge for adsl or fttc but soak this up as part of the contract cost.

 

We've never been charged a cease fee for a leased line by our carriers and we've access to them all (BT, Talk Talk, Virgin etc) who are exactly the same carriers as swgfl and others use so for me I think it is unfair to charge a school for what is essentially just an admin fee for them leaving.

 

I don't like charges like that and consider them stealthy and not in the spirit of good business. Certainly it just annoys customers even more and you can then definitely kiss your chances of them coming back in the future.

 

Just me thoughts.

 

Dave

[kennysarmy]

Well this seems mad to me.

 

If a customer cancels their contract or asks to cancel at the expiry of the term then there's no cease fee at all. Not for adsl, fttc or leased line.

 

We incur a small charge for adsl or fttc but soak this up as part of the contract cost.

 

We've never been charged a cease fee for a leased line by our carriers and we've access to them all (BT, Talk Talk, Virgin etc) who are exactly the same carriers as swgfl and others use so for me I think it is unfair to charge a school for what is essentially just an admin fee for them leaving.

 

I don't like charges like that and consider them stealthy and not in the spirit of good business. Certainly it just annoys customers even more and you can then definitely kiss your chances of them coming back in the future.

 

Just me thoughts.

 

Dave

 

Is the gotcha that I'm not cancelling at the expiry of the term (36 months) but 6 months before so that the contract can end when the contract should end? (scratches head!)

[IrritableTech]

Even factoring in the £250 exit fee, you may find much better value elsewhere making that sum seem quite small.

 

You've two months to get quotes from suppliers - the better ones are generally quite quick as they know their onions. If in two months there is a clear price difference, give notice while you work out which supplier proves best value. If you go back to them with three months left on your contract and ask to renew - you don't pay the fee surely?

[SchoolsBroadband]

Is the gotcha that I'm not cancelling at the expiry of the term (36 months) but 6 months before so that the contract can end when the contract should end? (scratches head!)

 

Just because you give them notice prior to the expiry of the term shouldn't mean penalising you for doing so as you say you want to cancel your service at the end of the current contract period and not before hand.

 

if they penalise you for doing so then you effectively have to have a long contract than 36 months if you have to give 6 months notice but get penalised if you put in notice before the end of the term then this is effectively a 42 month contract.

 

Dave

[EXA_Mark]

I have spoken to a few people (partners and schools) in the last couple of days about this, and like with the other commentators on here, I can see no valid reason for this charge at all.

 

SWGFL primarily (from a connectivity point) use BT and Talk Talk (RM) and Virgin in the mix too. None of those Telco suppliers charge for termination at the end of the minimum period as long as the correct notice period is given (generally 60 days). There could be potential charges for non-connectivity services, but the emails I have seen from SWGFL related specifically to connectivity.

 

My recommendation, as I have said to others, is to write to SWGFL or your local authority (If it is bought through them) and ask specifically for the break down of those additional charges, and what the cessation covers. I do not see how you can charge a "loss of income" cost to a customer for not renewing a contract. A loss of income cost is not an actual cost, it is, by its own definition, "a loss of income" from a contract not renewing. I would love to hear a solicitors read on that clause and the contract in general.

 

I am amazed that given the spotlight on certain Grids at the moment and potential overcharging or making large profits for their suppliers that they would want to take such a stance on such ambiguous charges or reasons for charging!

 

Ultimately as far as I am concerned you should not have to pay to exit a contract that has come to a natural end, surely that is the point of the contract.

[SWGfL_Official]

The SWGfL contract is there to benefit schools. @Steve21 is right, we do not integrate cessation charges into our standard pricing, which means we can reduce the cost of the service to customers.

 

We’re different to a private sector ISP because we’re a charitable body governed by public law. We’ve procured our service in accordance with relevant regulations. This means schools get protections that they wouldn’t normally get in contracts from standard suppliers, including limiting liability and data protection.

 

The way we do things is quite common in large public sector ICT arrangements, where services are priced for customers to stay rather than leave.

 

Hope this helps.

 

Julia

[synaesthesia]

Funnily enough I was just thinking something along the lines of "just because that's the way it often is, doesn't make it right". The above post confirms that!