Freeband TV News

Customers continue being short-changed by broadband providers

Written by Chris Andrews

Virgin comes out clean, launches trial which could massively increase customer base

UK Communications regulator Ofcom has delivered a damning report on ISPs and the headline broadband speeds they actually deliver, finding that the average household was receiving less than half the speed it was paying for.

The report found that average speeds have actually increased from 4.1Mbit/s to 5.2Mbit/s over the past year, so that's good news. Also that nearly a quarter of fixed-line residential broadband connections had an advertised speed above 'up to' 10Mbit/s, up from 8% last year.

The problem comes in the disparity between headline speeds and what is actually being delivered. In April 2009, average actual speeds were 4.1Mbit/s, or 58 per cent of average advertised 'up to' speeds of 7.1Mbit/s. In May 2010, average download speeds were 5.2Mbit/s, with the average advertised 'up to' speeds at 11.5Mbit/s. That's a mere 45 per cent of the fast packages that customers are paying for.

This gets worse when you look at more specific packages, with the average of those DSL providers offering up to 20 or 24Mbit/s actually delivering 6.5Mbit/s. It would appear that claims of fast broadband, which are being charged for accordingly, just aren't being delivered.

The study involved more 18 million separate service performances carried out in over 1,500 homes during May 2010 and concerned those DSL ISP packages with more than 250,000 residential customers, as well as Virgin Media's offerings. Ofcom is looking to include smaller providers in future research and plans to publish updated reports every six months.

Responding to this latest research, Robert Hammond, Head of Post and Digital Communications at Consumer Focus, said that people paying for a "Ferrari-style" Internet service should not get "push bike speeds" and that the Advertising Standards Authority should take a tough approach to broadband providers promising speeds they aren't delivering.

Ofcom itself has updated its Voluntary Code of Practice on Broadband Speeds which it introduced in 2008. ISPs which sign up to the revised Code, commit to giving consumers a more accurate and consistent estimate of the maximum speed likely to be achievable on their line.

ISPs also commit to help consumers improve their speeds while allowing the option of leaving contracts early without penalty (within three months of signing up to the service), if they receive a maximum line speed that is significantly below the estimate they are given at point of sale and the ISP is unable to resolve the problem.

"It is good that broadband providers are committing to give consumers better information about their likely internet speed and allow them to cancel if they are not getting what they signed up for," said Mr Hammond. "However, Ofcom should monitor closely the effectiveness of these new voluntary rules."

Ed Richards, Ofcom Chief Executive said: 'Ofcom's research shows that average speeds have increased which is good news, but there is scope for a further step change in the quality of the UK communications infrastructure.

"Actual speeds are often much lower than many of the advertised speeds which makes it essential that consumers are given information which is as accurate as possible at the point of sale; this is what the new Code is designed to deliver."

Ofcom said it is also in discussion with the Advertising Standards Authority and the Committee on Advertising Practice, both of which are currently reviewing 'up to' headlines from ISPs. Ofcom has suggested that speeds should only be advertised if at least some consumers are actually able to achieve those speeds. Also those who advertise 'up to' speeds, should also include a 'typical speed range' based on a standard currency to be developed, similar to those in other industries; so a broadband 'mile to the gallon' if you will.

Unsurprisingly cable offerings, specifically Virgin Media, faired far better. The company's 'up to' 10Mbit/s and 'up to' 20Mbit/s cable services delivered average download speeds around twice as fast as DSL packages with the same or similar headline speeds.

Jon James, executive director of broadband at Virgin Media, didn't miss the opportunity to put the boot in at the news.

"Whilst Ofcom's report is good news for our customers, it's clear that our DSL competitors just aren't keeping up with their promises of 20Mb broadband. No DSL customer receives 18Mb, only 2% are receiving more than 14Mb and, on average, DSL providers are delivering just 33% of their advertised 'up to 20Mb' speed," he said. "We need to ensure people are not being ripped off and the lack of transparency in broadband advertising risks damaging consumer confidence in superfast broadband. The Advertising Standards Authority has announced a review into the way broadband is advertised and the need for change is now urgent."

The report came as Virgin announced that it was trialling ultrafast broadband delivered over existing electricity poles in the Welsh village of Crumlin in Caerphilly. In an agreement with Western Power Distribution company Surf Telecoms, homes in Crumlin will be connected directly to Virgin's fibre network, without the need for digging up the road to lay cable.

Virgin said that this is the first use of existing commercial infrastructure to aerially deliver ultrafast broadband to a community currently beyond the reach of a fibre optic network. The company actually began trialling aerial deployment in the Berkshire village of Woolhampton back in March, though this involved purpose-built infrastructure.

Richard Doble, Design and Policy Manager, Surf Telecoms, said: "Western Power Distribution's electricity infrastructure reaches over 2.5 million homes across South West England and South and West Wales and with this trial, we're exploring an innovative new approach that could bring ultrafast broadband to many customers for the first time. The possibilities of aerial deployment promise a valuable use of existing infrastructure and an interesting new commercial opportunity for utility companies."

If the trial proves successful, it also represents an interesting new commercial opportunity for Virgin. It could see its customer base increasing substantially, without the need for additional heavy infrastructure investment; the glowing review from Ofcom will only increase demand on for its services.

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