Introduction

The ongoing issue between actual and advertised broadband speeds continues to be a problem in the highly competitive residential broadband market in the United Kingdom. Ofcom, the independent regulator and competition authority for the UK communications industries, announced on July 27, 2011 that the gap between what is advertised and what is delivered has increased and that, on average, the actual speed is 8.2Mbit/s lower than what has been advertised.

Misleading Advertising

The practice of advertising headline 'up to' speeds has frequently caused concern for Ofcom. Whilst some Internet Service Providers (ISPs) have modified their advertising practices, Ofcom still remains concerned that the 'up to' speeds are misleading consumers. Ofcom has pushed for changes to the way information is provided to consumers and has made a recommendation to the Advertising Standards Authority that a range of speeds must be provided that identifies the actual speeds achieved by at least half of the consumers. In addition, this information should have equivalent prominence to the advertised 'up to' speed which must, in order to avoid misleading consumers, actually be achievable by a material number of consumers. What is material remains to be determined.

The Broadband Speed Code of Practice

The Broadband Speed Code of Practice was initiated by Ofcom to ensure that consumers are provided with sufficient information before signing up for a broadband service. This voluntary code of practice has been implemented by a number of ISPs, including Virgin Media, BT Broadband, O2 and Sky. Ofcom has now strengthened the requirements to provide more detailed information and rights for consumers. This includes information relating to the likely speed range (as opposed to a single speed) and a right for a consumer to terminate the service where the actual speed is significantly lower than the bottom of the estimated range.

The Regulatory Battleground

Whilst the Broadband Speed Code of Practice goes some way to achieving greater transparency, openness and choice for consumers, advertising still falls short of achieving Ofcom's objectives. As a result, Ofcom is now urging the Advertising Standards Authority, the UK's independent regulator of advertising across all media, to implement the necessary regulatory change to the advertising codes of practice for both broadcast (BCAP) and non-broadcast (CAP) media. The Advertising Standards Authority is currently reviewing the rules in respect of broadband advertising and we expect changes to be made during the third quarter of 2011. The Advertising Standards Authority has numerous avenues for enforcing its codes of practice should misleading advertising continue to be a problem, including through referrals to the Office of Fair Trading for legal proceedings under the Consumer Protection from Unfair Trading Regulations 2008 or the Business Protection from Misleading Marketing Regulations 2008.

In the meantime, ISPs remain at odds with each other over who provides the most honest information. Against this battleground, there continue to be claims of misleading consumers, exaggeration and unfair comparisons. The heat flowing from this hot topic is only going to increase.