Telcoms regulator Ofcom is coming under pressure to take
action followingcomplaints from small businesses over the quality of their
broadband services.
Firms have complained that they are paying for advertised speeds
they do not receive, in what they claim amounts to mis-selling from
internet service providers.
A
Downing Street petition has received more than 10,000
signatures from small businesses and consumers demanding ISPs
advertise a typical rate for broadband subscriptions, not just a
theoretical maximum rate.
Christopher Meacher, systems controller and IT manager at Fold
Hill Foods, said his broadband provider is at best providing 12.5%
of its advertised speed.
Kenneth Spencer, who provides IT support to small and
medium-sized businesses, said his company pays £21.99 a month for
an "up to 8mbps" service, but it receives only 512kbps.
Ian Fogg, research director at Jupiter Research, said, "It is
in the interest of the economy to have clearer advertising on
broadband, to have comparability of ISPs across the industry, and
to encourage competition. At the moment there is no transparency
between broadband packages and prices, which makes it difficult for
small businesses to choose a provider."
Ofcom's Consumer
Panel, which provides independent advice to the telecoms
regulator, has
recommended introducing a code of practice for ISPs selling
broadband to businesses to address these concerns.
The code should require ISPs to explain the issues which could
limit speeds and allow user companies a longer cooling off period
after signing a contract to determine the adequacy of speeds. Where
the actual speed is significantly lower than what businesses pay
for, subscribers should be able to end their contract without
penalty.
However, Fogg said this was not enough. "A longer cooling off
period might help small businesses within the first week or two of
subscribing to a service to determine its adequacy. But if an ISP
does not have an incentive to invest in its network to support a
rise in users, the speed could degrade, and a cooling off period
won't help customers with 12- to 18-month contracts," he said.
Any code that Ofcom introduces should require ISPs to make
minimum investments in their broadband networks as the number of
its users rise, Fogg said.
But the real solution lies in changing the model ISPs use to
charge for broadband, said Antony Walker, chief executive of the
Broadband Stakeholder Group. He told a seminar in November that
broadband pricing based on speed rather than use was a hindrance
rather than a help. It has led to the false expectation that there
would always be equal bandwidth available to all users, regardless
of how heavily a network is used.
The answer is to charge businesses based on the bandwidth they
actually use. This may kick-start the process of ensuring higher
speeds for businesses and ensure that ISPs can increase network
capacity as demand rises.
Are you paying over the odds for leased line
connections? Computer Weekly is investigating the cost of leased
lines in different parts of the UK. E-mail your comments to
john-paul.kamath@rbi.co.uk