The Issue...

The broadband market has changed significantly in recent years with a huge increase in the number of consumers using broadband. Internet Service Providers (ISPs) often sell their services by claiming maximum available broadband speeds. However, consumers often receive a speed much slower than advertised. This is due to technical reasons: the size of the ISP's network, the distance from the phone exchange to a connection, the phone line, the number of other consumers sharing the service or using the internet at the same time. It is therefore important that ISPs advertise the speeds consumers will receive accurately and give better and more realistic information to consumers.

The Panel has been concerned about the way in which broadband is advertised and the information provided to consumers about speeds for several years. Enabling consumers to make an informed choice between the packages offered by different providers encourages competition and investment. This is because providers who have invested in delivering actual speeds that are close to headline speeds are likely to be rewarded by consumers purchasing their packages. Consumers can make such informed choices only if they can easily compare the different packages and providers. Advertising is a key way in which consumers gain this information. The Panel believes the "up to" descriptor is no longer credible or sustainable and must be replaced by some type of typical speed descriptor.

Our Objective...

To influence Ofcom to take steps towards ensuring that adequate information about broadband speeds is available to consumers and to influence CAP and BCAP to change broadband speeds advertising practices to avoid misleading consumers.

Our Current Position...

The Panel has advised Ofcom to encourage investment in capacity to help with contention which would increase speeds for consumers on DSL services and to look for a pragmatic and quick solution to the broadband speeds issue.

In relation to changes to Ofcom's Broadband Speeds Code of Practice, the Panel advised Ofcom to:

• consider carefully whether the voluntary approach is viable given the incentives of ISPs, particularly those which are shown by Ofcom's research to be performing poorly;
• carry out experimental research to test the extent to which consumers can make use of the information that ISPs are required to provide. For example, how easy do consumers find it to use online checkers to check their broadband speed and how likely are they to complain to their ISP if they are unhappy with the performance they are experiencing;
• consider whether the revised Code places too much emphasis on consumers acting on, often hard to find, information about their broadband speeds and whether there should be more onus on ISPs to take action to help consumers with low broadband speeds. Members recommend that ISPs be required to advise customers of the actual speed they are receiving within one month of purchasing a service and provide advice on: options to improve the speed; moving to an alternative tariff; or cancelling their contract;
• consider what protection can be put in place for consumers outside the bottom ten per cent to be able to get their ISP to improve performance and whether they should have the option to cancel their contract; and
• be clear about its time frame for reviewing the Code and reviewing whether it has been successful. Ofcom should send a clear message to industry about what measures will be used to measure success and what will trigger a move to formal regulation.

In relation to the advertising of broadband speeds the Panel thinks that the "up to" descriptor is no longer credible or sustainable and is causing widespread scepticism amongst consumers. Using the "up to" descriptor in combination with a typical speed or speed range is also unacceptable. Such combined information does not pass the "simple" test; consumers are likely to see the two descriptors as contradictory, which could lead to further confusion and scepticism. The Panel is clear that the "up to" descriptor must be replaced by a better descriptor, designed and presented with the consumer in mind. To ensure that consumers are not confused about the speed they are likely to receive we advised CAP and BCAP to consider the following points when deciding which typical speed descriptor to choose:

• Descriptions of the service should be kept short and simple and important information must not be relegated to the small print.
• The descriptor should indicate that speed is not the same for all, therefore prompting consumers to ask for actual speeds for their property at point of sale.
• A single speed rather than a speed range is less confusing for consumers.
• The mathematical "average" term is confusing and irrelevant for many consumers.
• Not all consumers understand percentages and therefore could find a descriptor using a percentage figure confusing. Consumers generally find it is easier to understand descriptors such as "half", "two thirds" or "three quarters".
• Consumers are more interested in what they can do with a speed than what the speed actually is, so slow, medium and fast descriptors could be useful as part of a definition, provided the ASA give clear examples of what can be done with slow, medium and fast speeds.

We suggested that consumers are likely to respond favourably to typical descriptions, such as, "2 out of 3 people receive at least xMb" or "half of our customers receive at least xMb." But recommended that all concrete proposals will need to be tested with consumers.

The Panel also thinks the "up to" descriptor should not be used in any qualifying phrase either. Behavioral economics shows that disadvantaged consumers are more likely to become disadvantaged by confusing and lengthy information in adverts (see section 2.2). Further it is widely accepted that consumers rarely read the small print in adverts. This leads the Panel to conclude that adverts must be short, simple and with minimum information included in small print.

Notwithstanding the above, the Panel would like sales materials and adverts to include a prominent statement encouraging consumers to ask for the actual speed at point of sale.

Our Impact...

• The ASA stated that the Panel's input was a contributing factor in the decision for CAP and BCAP to undertake the review of broadband speeds advertising.
• The Panel's letter to Government contributed to the Government's highlighting broadband speeds as an important issue in its broadband strategy.

Relevant Links...

Response to CAP & BCAP Consultation on Broadband speeds Advertising, Feb 2011

Letter from Culture Minister Ed Vaizey on broadband speed advertising, Sept 2010

Letter to Culture Minister Ed Vaizey on broadband speed advertising, Aug 2010

Letter from Guy Parker, ASA, to Anna Bradley on broadband headline speed in advertising, Feb 2010

Letter on broadband speeds advertising to Guy Parker, ASA, Dec 2009

Submission to the Business and Enterprise Committee Inquiry into Broadband Speeds, Sept 2009

Future Action to be Taken...

The Panel intends to continue to monitor Ofcom's work on broadband speeds closely and provide further advice at the next appropriate point.  It would like to monitor whether Ofcom takes on board the Panel's advise in relation to the Broadband speeds Code of Practice, and whether it reviews compliance with the Code and measures whether it has been successful in a timely manner.

The Panel also intended to continue to monitor the work of the ASA, CAP and BCAP in relation to the advertising of broadband speeds and assess whether a change to a typical speed descriptor is beneficial for consumers.

Our Actions, Outputs and Stakeholder Engagement...

Throughout 2009 and 2010 the Panel has engaged with Ofcom in relation to their broadband speeds research programme, offering advice as to how the work could affect consumers.

In July 2010 the Panel discussed Ofcom's Draft Broadband speeds Code of Practice with Ofcom at a Panel meeting and subsequently set outs its advice on the code to Ofcom in an advice note. The Panel also felt that Ofcom should have undertaken wider engagement, particularly with consumer bodies, when proposing changes to the Code.  Not undertaking this engagement meant that consumer bodies were not able to contribute to the debate and the Code was agreed privately between Ofcom and ISPs.

In September 2009 the Panel responded to the Business and Enterprise Committee Inquiry into Broadband Speeds stating that consumers needed accurate information about the speeds they could expect as there were considerable differences between the headline speeds advertised by many providers and the actual speeds consumers received. In December 2009 the Panel followed this up by writing to Guy Parker, Chief Executive of the ASA stating that it thought the current system was misleading and had the potential to distort the market, resulting in less choice for consumers.

During 2010 the Panel continued to engage with Ofcom and the ASA on this issue. In August 2010 the Panel wrote to Ed Vaizey - Minister for Culture, Communications and Creative Industries stating that the Panel believed ISPs should change their advertising practices in order to avoid the danger of misleading consumers. The Panel also encouraged the Committee on Advertising Practice (CAP) and the Broadcast Committee on Advertising Practice (BCAP) (at the ASA) to strengthen their code so that ISPs must advertise average or typical speeds rather than up-to-speeds.

In November 2010 the Panel again considered the advertising of broadband speeds at a Panel meeting and gave advice to Ofcom.  The Panel then responded to the CAP and BCAP review of broadband speeds advertising, in February 2011.

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