Ofcom proposes cut to minimum broadband contracts

Telecoms regulator Ofcom wants to make it easier for customers to switch broadband providers by lowering the cost of the move and cutting the length of minimum contracts

Telecoms regulator Ofcom has proposed new regulations to cut the minimum length of broadband contracts, making it easier for consumers to switch providers.

Internet service providers (ISPs) that offer services over BT’s network through virtual unbundled local access (Vula) currently have a minimum of one year on their contracts, meaning consumers are locked in for long periods. Ofcom wants to reduce this time to just one month.

The regulator also wants to reduce the £50 charge levied by BT OpenReach – the section of the business responsible for the unbundled lines – to ISPs when users change providers to between £10 and £15, as the cost is often passed down to the customer.

Ofcom said the proposals were not an attempt to control the prices of Vula, as it believed they are already constrained thanks to the number of offerings available and the competition from Virgin Media’s fibre network.  

However, it said it wanted to “maintain a requirement that BT’s charges for access to its fibre network are fair and reasonable”.

In 2012, there were 1.4 million connections using Vula, compared with just 100,000 when the offering was first introduced in 2010, showing it is an increasing service model.

The report from Ofcom also proposes new rules that would require BT to meet specific standards when it came to line installations and fault repair following poor performance in 2012 – which BT blamed on excessive wet weather.

“OpenReach’s performance has since returned to pre-2012 levels,” said the regulator, “however, Ofcom wishes to ensure that its performance remains at an acceptable standard.”

The consultation on the new proposals is open until 25 September 2013, although a report date has yet to be set.

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