Ofcom puts broadband speeds at heart of 2009 plans

Communications watchdog lays out key priorities for next year

Ofcom has announced its plans for 2009

UK ISPs will tomorrow implement a voluntary Code of Practice designed to stop them misleading customers over broadband speeds and improve customer service.
They will act the day after telecoms watchdog Ofcom published still-to-be-defined proposals for enforcing consumer protection policies that punish mis-selling and help customers switch broadband providers.

Ofcom’s draft annual plan for 2009/10 will also examine the mobile broadband market, with a view to deregulating controls in the hope that competition amongst mobile operators will bring per-megabyte prices down further.

More than 40 ISPs including Be, BT, Demon, Pipex, Plusnet, Sky, Tiscali and Virgin Media, have agreed to provide more accurate estimates about achievable data speeds in their promotional material, following widespread complaints about slower-than-advertised bandwidth in the past.

“ISPs were advertising 24Mbit/s and 8Mbit/s maximum speeds when those speeds were not available,” said Scott Morrisson, research vice president at analyst Gartner.

“It was not made clear to customers that there was no uncontended bandwidth back to the internet, even if they could get 8Mbit/s from their house to the exchange,” he said.

Communications Consumer Panel chairman Anna Bradley said the new code addresses the concerns that were raised with Ofcom and the ISPs last year about broadband speeds.

“[There is a] mismatch between the speeds that consumers think they are buying and what they actually get,” she said.

Ovum analyst Matthew Howett said switching has been a big item on Ofcom’s consumer agenda for a long time, and the Code of Practice should be viewed in line with other work for consumer protection.

“Ofcom has mainly focused on mobile mis-selling to date, but it is now shifting to fixed line mis-selling, which is considered to be just as much of a problem,” he said.

BT Retail said the company has today made clarifications to its fair usage policy to make it clearer about what circumstances it employs traffic management and where there are limits on downloads.

“BT is as much a victim of switching problems as anybody else – the number of those has fallen, but there are still some unscrupulous operators who demand that customers pay fees up front before they release the MAC codes needed to switch accounts,” said a BT spokesman.

Ofcom also plans to focus on mobile broadband. The European Commission is already piling considerable pressure onto mobile network operators to reduce prices, which - combined with an expansion in the number of mobile virtual network operators - means the mobile broadband market is closer to reaching the level of competitiveness that Ofcom requires if it is to deregulate.

“If [mobile broadband] price points get to the stage where mobile operators are no longer perceived as an oligopoly acting in a cartel fashion, providers could be allowed to set their own prices more freely and competition would settle the rest in much the same way as it has in the fixed telecom world,” said Morrison.

Ofcom’s 2009 plan will also focus on making sure BT adheres to the open access promises which brought about the establishment of its Openreach division, as well as formulating regulation for next-generation broadband services, making better use of wireless spectrum, and concluding its investigation into the pay-TV market.

Morrisson said the UK still lags behind many other countries in next-generation broadband availability such as 24Mbit/s ADSL2+ and the converged voice, data and video services this supports, which means providers have little option but to compete on price and line speed.

“Fibre to the home and very high-speed DSL (VDSL) is only available on one estate in Ebbsfleet, whereas other European countries have 10-20 per cent of homes already passed by fibre or VDSL solutions,” he said.

BT has made ADSL2+ available to communications providers and BT Retail expects to make ADSL2+ available to as many people as possible in the first half of next year, said BT’s spokesman.