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New 2016 voluntary code of practice: Business broadband speeds
On 26 January 2016, Ofcom (the UK communications regulator) introduced a new Voluntary Business Broadband Speeds Code of Practice (the “Code”). The new Code was produced in collaboration with industry in response to reports of confusion, particularly among small and medium sized businesses, about the speed that can be achieved by their broadband services and, more specifically, the speed businesses believed they were purchasing versus the actual broadband speed.
A voluntary code
The Code is aimed at Internet Service Providers (ISPs) and participation is voluntary. For those ISPs that choose to sign up, the Code is a commitment to provide business customers with transparent and accurate information on the speeds of their standard business broadband services irrespective of the size of the business. A similar voluntary code already exists for residential broadband speeds which imposes comparable requirements on ISP signatories with respect to consumers.
The Code is voluntary and so its signatories are not held to hard and fast obligations – instead they agree to endorse the objectives of the Code and abide by its principles. Ofcom intends to monitor signatories’ ongoing compliance with the Code using measures such as mystery shopping and as audits of ISPs’ internal processes, but does not provide any guarantees of compliance. As it has done with the residential code, it is possible Ofcom will post results of its compliance reviews on its website, naming specific ISPs.
The Code sets out in detail the specific services to which it applies, and those services that are excluded. Broadly speaking, the Code applies to ISPs providing “xDSL” broadband technologies where speeds can vary depending on the technical characteristics of the line and/or fixed broadband delivered via a fixed wireless technology. As such, the Code does not apply where broadband speeds are guaranteed or will not vary.
The Code is focused on business customers – but not all of them. Only new customers and existing customers who buy new services can take advantage of the Code – it does not apply to existing customers who merely retain their current service.
So what’s it all about?
The Code sets out five principles which signatories agree to provide to their relevant business customers:
- Transparent and accurate information on broadband at point of sale
- Detailed information after the sale and on the website
- Manage speed-related problems
- Right to exit the contract without penalty where speed problems cannot be resolved
- Deliver the objectives of the Code through appropriate processes
Each of these principles is outlined briefly below, and expanded on in the Code.
Principles 1 and 2: Information
Principle 1 requires ISPs, as early as practicable in the sales process and prior to the customer agreeing to purchase the service or upgrade their existing package, to provide customers with transparent and accurate information about estimated download and upload access line speeds (and throughput speeds, where available). This information must be provided in the most relevant way to the customer, which may dependent on the mode of sale. ISPs must also provide a facility on their website to enable customers to find out what their estimated speeds will be if they choose a particular service.
Principle 2 requires ISPs to provide all relevant speed-related information and details about the customer’s right to exit the contract in writing within 7 calendar days of a customer purchasing a service.
Principle 3: Management
Following the parties entering into a contract for broadband services, IPSs must manage situations where customers are experiencing speed related problems, and be able to identify the cause of the problem and whether the problem is within the ISP’s control. If it is, the ISP must take all reasonable steps to ensure it is corrected, or otherwise assist the customer by explaining possible causes and how to address them.
Principle 4: Right to exit
A key provision of the Code is the right for customers to exit their contract without penalty where the download speeds fall significantly below the range given at point of sale, and the issue cannot be resolved. “Significantly below” has been defined by the Code to mean where the speed is below the access line speed achieved by the bottom 10th percentile of similar customers of the ISP. The Code sets out the process to be followed when the right of exit may apply. Importantly, the right of exit only applies after the ISP has taken all reasonable steps to resolve the issue. While ISPs can offer other remedies, such as discounts or new lines, the customer is under no obligation to accept them in lieu of exiting the contract.
Principle 5: Appropriate processes
Principle 5 requires ISPs to have in place appropriate processes to ensure they are working within the ‘spirit’ of the Code and make every effort to comply with it. Ofcom may remove as signatories any ISPs who fail to apply the principles of the Code.
Where to from here?
Current signatories to the Code, as listed on the Ofcom website, are: BT Business; Daisy Communications; KCOM (Hull business); Talk Talk Business; Virgin Media; XLN; and Zen. These ISPs must implement the Code by 30 September 2016 and must inform Ofcom when they have done so. For ISPs looking to sign up to the Code from this point forward, they must first implement the Code in order to be confirmed as signatories.
The voluntary nature of the Code and signatories’ commitment to endorse its ‘spirit’ rather than adhere to the letter, mean ISPs have a fair amount of freedom to decide whether and how they wish to implement it. Given the lack of real enforcement measures available to Ofcom, a key factor in encouraging ISPs to follow the Code is the potential for reputational damage arising out of a refusal to sign up or failure to comply.
It remains to be seen how ISPs react to the Code once operational. However, the fact seven of the top broadband providers have already signed up is a positive sign, and we might also expect that at least those ISPs who provide both residential and business services will be more willing to implement the Code without great difficulty or resistance, given they should already be accustomed to similar requirements in the residential code.