29 January 2016 09:00
New Ofcom code for SMEs using broadband
UK businesses will receive more accurate information on the broadband speeds they should receive, under new protections announced by Ofcom this week.
As part of a new Ofcom Code, providers will agree to give businesses more accurate and transparent information on broadband speeds - before they sign up to a contract. Under the Code, businesses taking a new broadband service will, for the first time, enjoy a similar level of protection as residential broadband users.
Signatories to the voluntary code also commit to manage any problems that businesses have with broadband speeds effectively, and allow customers to exit the contract at any point if speeds fall below a minimum guaranteed level.
Seven of the UK's broadband providers for businesses - BT Business, Daisy Communications, KCOM, TalkTalk Business, Virgin Media, XLN and Zen - have signed up to the Code so far. They provide a service to around two thirds of SMEs who have standard broadband.
Ofcom has also expressed concerns about what it calls "speeds gaps" - the mismatch between what broadband customers believe they are buying and the actual service delivered.
Ofcom research found that many SMEs are confused about how the "actual" speed of their broadband service compared to the "headline" maximum speed advertised by providers. A fifth (20%) of SMEs are not satisfied they are getting the speeds they have paid for.
Sharon White, Ofcom Chief Executive, said:
"Ensuring consumers get the best possible communications services is Ofcom's top priority. Where broadband companies fail to provide the speeds they promise, we've made it easier for businesses to walk away from their contracts without penalty. Providers have also agreed to give clear and reliable speeds information upfront so business customers can make more informed decisions."
Mike Cherry, Policy Director for the Federation of Small Businesses (FSB), said:
"A dependable broadband connection is now essential for almost every aspect of modern business life. Yet small business dissatisfaction with broadband providers appears to be widespread and deeply felt. The new Code of Practice announced by Ofcom is a timely and well-targeted intervention in the business broadband market."
Ofcom's Voluntary Business Broadband Speeds Code of Practice comes into effect from 30 September 2016.