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January 26, 2016updated 31 Aug 2016 9:37am

Businesses get minimum broadband speed guarantee with Ofcom’s ISP code

News: Move follows announcement of new rules restricting misleading advertising in the consumer space.

By Alexander Sword

Ofcom is introducing protections for business broadband customers that aim to ensure that they receive accurate and reliable information on the speeds that they are getting.

The new voluntary Ofcom Code of Practice will see providers agreeing to give businesses clear and accurate information on the speeds they will get before they sign up to the contract. This will cover both download and upload speeds.

They will commit to effectively manage any problems businesses face with their broadband speeds and allow customers to exit the contract immediately if the speed falls below a minimum guarantee.

BT Business, Daisy Communications, KCOM, TalkTalk Business, Virgin Media, XLN and Zen are initial signatories of the code. It will come into effect from 30 September 2016.

The announcement follows a study that revealed not all providers were giving personalised speed estimates to businesses when selling; 20 percent of SMEs were not satisfied they were getting the speeds they had paid for.

Sharon White, Ofcom Chief Executive, said: "Ensuring consumers get the best possible communications services is Ofcom’s top priority. And that includes businesses getting the broadband speeds they need.

"Yet too many buy unsuitable broadband packages because of confusing or insufficient sales information, or are hampered by slow speeds after they’ve signed on the dotted line."

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The new Ofcom initiative represents the enterprise arm of a wider crackdown on broadband advertising, which research has recently revealed is found confusing and misleading by many customers.

In the consumer space, the Advertising Standards Authority (ASA) recently announced new rules on the way broadband is advertised, to be implemented by 30 May 2016.

Among the findings of its study, commissioned jointly with Ofcom, only 23 percent of people were able to correctly identify the total cost per month after viewing an ad and being asked to recall as much information about the offered deal as possible.

Asked the same question, 34 percent recalled pricing information but were only able to give a partial or incorrect figure for the broadband service or line rental costs. After a second viewing 22 percent of participants were still unable to correctly identify the total cost per month.

The research also found that 64 percent of these people thought that the headline price for broadband in a package was the total cost, with no additional applicable costs such as line rental.

The ASA‘s draft measures call for all-inclusive up-front and monthly costs, with no separation of line rental.

Mike Cherry, Policy Director for the Federation of Small Businesses, said: "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. Business owners should be able easily to compare suppliers and exit a contract early if their communications provider does not deliver the speeds promised."

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