Yes it absolutely is false advertising and I can imagine quite a few people will be caught out by it, very disappointing as it seemed like a great deal and entry into the TV system which I was looking to do (plus add some extras) but I think I will leave it now and stick with my broadband-only package.
I've reported it to the ASA, clear false advertising designed to trick people into signing up and then hitting them for more money. Shocking behavour from a company as big as BT.