Following research that showed that a fifth of small and medium businesses were dissatisfied about their ability to access the broadband speeds paid for, Ofcom and certain internet service providers have worked together to produce the “Voluntary Business Broadband Speeds Code of Practice” (the “Code”). The Code sets out voluntary commitments entered into by its signatories to provide business customers with transparent and accurate information on their standard business broadband services and remedies for failures to provide the minimum guaranteed speeds, and will come into force on 30 September 2016.

What?

The Code requires internet service providers (“ISPs”), who are signatories to the Code, to:

  • provide customers with transparent and accurate information on the speeds of their standard business broadband services;
  • provide customers with the provision of detailed information during the term of the agreement;
  • manage business customers’ speed-related problems; and
  • allow customers to exit contracts without penalty if access line speeds fall and remain below a minimum guaranteed speed.

The Code requires access line speed information to be provided for “xDSL” technologies but does not apply to technologies or services where speeds are guaranteed or will not vary as the customer has its own dedicated connection such as leased lines (e.g. Ethernet over fibre to the Cabinet (EoFTTC), Ethernet First Mile (EFM), or similar). Broadband services which connect to a private internal system rather than directly to the internet are also excluded. All businesses, regardless of size, will benefit from the provisions of the Code with the exception of existing customers who simply retain their current service.

Current signatories to the Code are: BT Business, Daisy Communications, KCOM (Hull business), Talk Talk Business, Virgin Media, XLN and Zen (the “Code Signatories”).

Under the Code, these signatories will need to:

1. Provide information on broadband speeds prior to the point of sale

The Code Signatories will be under an obligation to provide estimated download and upload access line speeds, and throughput speeds (if available), for standard broadband services using xDSL technologies or fixed broadband delivered via fixed wireless technology, as early as practicable in the sales process, regardless of the sales channel the customer uses to engage with the Code Signatories. Speed information must always (other than for large business customers) be provided prior to the purchase of the services being concluded. Similarly, Code Signatories will need to ensure that customers who may have difficulty understanding the products/services are adequately and appropriately informed about all products and services that are available. Further information must be available on the Code Signatories’ websites, including a full copy of the Code, and the customer must be informed that these resources are available. The Code Signatories will also be required to inform customers that further information on estimated speeds, and how traffic management and/or fair use policies may impact their broadband speed, will be set out in more detail after the sale. In particular the Code Signatories must explain where traffic management and/or fair use policies apply, what this means for the customer, and how their speeds may be affected.

Code Signatories will be required to provide a facility e.g. a line/speed checker on their website, providing an individual estimated access line speed range for the customer (showing download and upload speeds), should they choose to purchase the service, which shows the line speeds achieved by the 20th to 80th percentiles of the Code Signatories’ similar customers. If customers then receive a speed lower than the bottom 10th percentile, they will be seen as falling below the “minimum guaranteed access line speed” and may be entitled to exit the contract in accordance with Principle 4 of the Code.

2. Provide detailed information after the sale, and on their website

Once a business customer has purchased a broadband service, Code Signatories will need to provide certain information, including:

  1. for xDSL and fixed broadband delivered via fixed wireless services: (i) the estimated download speeds and upload access line speeds, the minimum guaranteed access line speed and the customer’s right to exit the contract; and (ii) give equal prominence to the fact that the customer has the right to leave their contract without penalty if the customer receives an access line speed below the minimum guaranteed access line speed and the measures set out in Principle 4 have been taken but the issue has not been resolved;
  2. an estimate of through speed (where available) and an explanation of factors that may affect the actual through speed experienced by a customer;
  3. an explanation of factors that may cause peak time congestion;
  4. information on traffic management policies and links to the information set out on the Code Signatories’ website; and
  5. an explanation on any fair usage policies and links to the information set out on the Code Signatories website;

In relation to traffic management and fair use policies, this information must also be available in a prominent place on the Code Signatories’ website, including publishing the criteria used to determine breaches of any fair use policy and post-breach actions. Where Code Signatories apply usage limits they should provide a means by which users can measure their usage, and consider providing advance notification if customers are approaching that limit e.g. by email.

3. Manage speed-related problems

Code Signatories regardless of the technology used must be prepared to manage customers’ speed-related problems, including providing assistance to alleviate the problem if it is within the control of the customer, and to correct the problem if it is caused by the network provider. Code Signatories are also required to have a robust process in place to identify whether the cause of the speed-related problem is within its control and to be able to monitor the problem through to resolution. Code Signatories must ensure that they highlight the above processes on a prominent position on their website, or in the introduction/starter pack that accompanies the provision of the services.

4. Provide customers with a right to exit the contract without penalty, where speed problems cannot be resolved

Code Signatories must allow customers to exit contracts without penalty, at any time during the contract, if the customer’s download access line speed falls significantly below the minimum guaranteed access line speed, the bottom 10th percentile of the estimated range given at point of sale.

The right of exit only applies in relation to “xDSL” technologies (including ADSL and FTTC) where download access line speeds are given, and fixed wireless access (including satellite), and does not apply to cable or fibre to the premises technologies. Notably, it does also apply to ‘bundled’ services, with voice and broadband services purchased at the same time (including where standard voice and broadband services are bought together), or ‘dependent’ services (i.e. services such as VoIP and cloud-based services which are dependent on the cloud-based services).

The right of exit can only apply to the specific line affected rather than multiple lines, but only after the Code Signatory has taken all reasonable steps to resolve the speed issue, and the speed remains below the minimum. The steps to be taken include: possession of a robust system for identifying a slower than expected line speed, logging the issue as a ‘technical fault’ and then taking all reasonable steps to ensure the fault is corrected, and providing the customer – if diagnostics appear to show the problem is within the customer’s control – with assistance to alleviate the problem. If the speed remains below the minimum guaranteed access line speed, the right of exit will apply.

Code Signatories are able to offer other remedies, however the customer is under no obligation to accept these remedies.

In delivering on the above principles the Code Signatories are required to have processes in place to ensure that their agents understand the objectives and spirit of the Code, and receive appropriate training to ensure they are able to give the information on speeds and the rights of exit as required. Code Signatories should have their own internal processes to check compliance, and Ofcom will conduct ‘mystery shopping’ and audits of these internal processes to validate the compliance of the Code Signatories with these requirements.

The Code will come into practice from 30 September 2016.

So What?

It is hoped that the provisions of the Code will result in greater transparency in the business broadband sector, with Code Signatories required to take positive steps to counteract any confusion stemming from the difference between advertised and actual broadband speeds, and providing a greater understanding of how fair use and traffic management policies can apply. These provisions may also result in greater competition due to increased awareness of the difference between competing providers’ offerings. Ofcom believes that the introduction of the Code represents another initiative that is targeted at cracking down on misleading and confusing advertising, and Ofcom’s CEO Sharon White confirmed that the measures centre on “ensuring consumers get the best possible communications services”.

Furthermore, the explicit right of exit will give customers a stronger bargaining position, and the ability to exert pressure on their ISPs (provided that they are Code Signatories) if they are consistently suffering from a sub-standard broadband speed, providing a stronger level of protection more akin to that of residential broadband users.

The release of the Code by Ofcom has also been welcomed in the small business community. Mike Cherry, policy director for the Federation of Small Businesses, stated that “the new Code of Practice announced by Ofcom is a timely and well-targeted intervention in the business broadband market. To plan effectively, firms need accurate information on what speeds they can expect, and how much this will vary”.