The United Kingdom’s telecom regulator, Ofcom, wants to strengthen an industry code that lets Internet customers exit contracts without penalty when broadband providers fall short of their advertised speeds.
Ofcom’s proposed changes would also improve the accuracy of speed information provided to customers before they sign up for broadband. Ofcom intends to add the new guidelines to its existing codes of practice for residential and business broadband speeds, which already “commit Internet companies who have signed up to them to give customers an estimated range of speeds they are likely to receive, as well as the right to exit their contracts penalty-free if their speed falls below a minimum level.”
The regulator described proposed additions to the code on Friday, saying that its plan is to:
- Improve speed information at the point of sale and in contracts by reflecting the slower speeds people can experience at ‘peak’ times; and by ensuring providers always give a minimum guaranteed speed before sale.
- Strengthen the right to exit if speeds fall below a guaranteed minimum level. Providers would have a limited time to improve speeds before they must let customers walk away penalty-free. For the first time, this right to exit would also apply to contracts that include phone and pay-TV services bought with broadband.
- Increase the number of customers who benefit from the codes, by expanding their scope to apply to all broadband technologies.
“We plan to close the gap between what’s advertised and what’s delivered, giving customers a fuller picture before they commit to a contract,” Ofcom Consumer Group Director Lindsey Fussell said. “We’re also making it easier to walk away from a contract, without penalty, when companies fail to provide the speeds they promise.”
Under the revised code, ISPs would “have to give people a minimum, guaranteed speed at the point of sale—not just if requested and in after-sale information, which are already requirements,” Ofcom said. ISPs would get a maximum of one month to improve speeds before customers can exit contracts without penalty.
The right to exit contracts without penalty would be triggered when a customer’s actual download speed falls below the minimum guaranteed speed “on a daily basis for at least three successive days (whether continuously or intermittently),” according to a draft.
ISPs would have to implement a “robust process” to evaluate speed problems and “take all reasonable steps to ensure the speed problem is corrected within 30 calendar days” in cases when the cause of the problem is under the ISP’s control.
The current code lets customers exit contracts without penalty within three months of signing up for service if actual speeds are significantly lower than estimated speeds.
Ofcom is taking comments on its proposed changes until November 10 and says it intends to issue a final decision early next year.
In a separate proceeding, Ofcom also plans to require automatic refunds for landline and broadband customers for problems such as slow repairs or missed deadlines and appointments.
UK ISPs on board with voluntary code
While the code of practice is voluntary, the biggest ISPs, including BT, Sky, and Virgin Media, have signed on to the current version of the code. Ofcom regularly commissions “mystery shopping” tests and issues reports detailing ISPs’ compliance, giving UK residents helpful information for choosing an ISP.
BT is already on board with the changes. “We remain firmly supportive of Ofcom’s voluntary code of practice on broadband speeds, including the latest proposed changes which we hope will make things even clearer for our customers,” BT said, according to the BBC. “We have been working with Ofcom and other ISPs to improve the code.”
The Internet Services Providers’ Association (ISPA), an industry lobby group, is also generally supportive of the proposal. “ISPA supports the consultation and the direction of travel that is being proposed by Ofcom,” an ISPA spokesperson told the BBC.
ISPA pointed out that some of the factors affecting Internet speeds “are outside the control of the provider,” but the group said it “agree[s] with Ofcom that speeds need to be communicated in a transparent manner.”
US eliminating consumer rights
UK broadband customers have more choices than US-based users because of unbundling rules that let UK ISPs lease access to network infrastructure from BT subsidiary Openreach, instead of installing their own wires into each home. In the US, residential customers can’t easily shop around for service because they are generally limited to ISPs that have built their own last-mile infrastructure.
Federal Communications Commission Chairman Ajit Pai also plans to deregulate US broadband providers, eliminating the right of consumers to complain to the FCC about “unjust” or “unreasonable” rates and practices. Pai’s FCC has also suggested lowering the standard it uses to evaluate broadband deployment progress.
Separately, the FCC issues an annual report comparing broadband providers’ advertised speeds with actual speeds, but it doesn’t give consumers a “right to exit” broadband contracts when speeds fall short.
New York Attorney General Eric Schneiderman is suing Charter and its Time Warner Cable (TWC) subsidiary, alleging that the ISP promised Internet speeds that it could not deliver. Broadband industry lobby groups recently asked the FCC for protection from such lawsuits, saying that the commission should declare that advertisements of speeds “up to” a certain level of megabits per second are consistent with federal law.
Guarantees for copper and cable users
The UK codes mostly apply to broadband over copper-based phone lines, because speeds are slower when buildings are farther from local telephone exchanges or cabinets. But the new proposal will offer protections for cable Internet users as well, Ofcom said.
“The proposed new codes require estimates that reflect speeds at busy times, which can be a particular issue on cable networks, such as the one operated by Virgin Media,” Ofcom said. “So in future, cable customers will also benefit from these protections.”
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