Ofcom is to crack down on the major ISPs after research showed that some fail to give potential buyers clear information about the broadband speeds available.
All the major ISPs — including BT, Virgin Media, Sky, TalkTalk, O2 and Orange — signed up in 2008 to a voluntary Ofcom code of practice that committed them to providing transparent information to consumers. The code requires them to state both the advertised maximum speed and the estimated speed of the line, and explain simply the technical limitations of broadband.
Ofcom said on Monday that it wants to tighten the code by the summer to ensure that ISPs keep to this commitment, after it conducted 'mystery shopper' research that showed some fell short of their promise in some areas.
"Consumers are now receiving more accurate information at the point of sale about their broadband service. But our mystery shopping research reveals there is still significant further progress to be made, particularly in relation to the checkers used to calculate line speeds," the telecoms regulator's chief executive Ed Richards said in a statement.
In the mystery shopper exercise, which Ofcom carried out by phone and online, 42 percent of potential customers had to ask for an estimate of the maximum possible speed on their broadband line, and 15 percent did not receive the information at all.
Furthermore, 74 percent of mystery shoppers were not told that the speeds they would receive were likely to be less than the maximum. Because of the way broadband signals are transmitted along copper telephone lines, speeds actually achieved by consumers decrease markedly with distance from their telephone exchange.
In addition, ISPs told six percent of mystery shoppers that they could not provide an estimated speed.
Richards said the information being provided to consumers from providers had improved, but he said more progress had to be made. If the ISPs do not agree to the proposed changes to the code of practice, Ofcom said it will consider introducing formal regulations.
Among the changes Ofcom is proposing is a commitment from providers to give an estimate of line speed earlier in the sales process, before it asks for financial details. It also wants ISPs to tell customers more clearly why the actual speeds on their broadband line might be slower than the maximum speeds possible.
Another proposal is to give consumers the right to terminate their contract if their broadband speed is too far below what was promised at the time of purchase.
In addition, the regulator wants ISPs to work on coming up with a consistent way of calculating and presenting information about line speeds. In its report on the mystery shopper exercise, Ofcom found a large variation in estimates from ISPs, with some promising double the speed for the same broadband line and DSL technology.
The regulator also found that just 43 percent of speed estimates were within 1Mbit/s of the estimate cited by BT Wholesale, which it said was a reliable benchmark. The worst disparities were for ADSL2+, it said.