Broadband suppliers criticised for false claims about internet speed

Services tend to be half as fast as advertised, regulator concludes

Broadband customers receive only half the speed they pay for when downloading pages, music, films and other material from the internet, Ofcom discloses in a definitive survey which confirms suspicions that services are far slower than advertised.

While most customers in the UK subscribe to packages offering "up to 8 Mbit/s" (mega bits per second) nine major broadband companies delivered only 4.1 Mbit/s, 57 per cent of the "headline rate". No customers achieved the top speed; the maximum was 7.1 Mbit/s.

Ofcom found significant differences between internet service providers (ISPs). Tiscali 8 Mbit/s customers received on average 3.2 to 3.7, while AOL and BT struggled to deliver much more than 4 Mbit/s. By contrast, Virgin Media's "up to 10 Mbit/s" cable package delivered 8.1 Mbit/s, far superior to the other packages.

The report UK Broadband Speeds 2009 said the major factor determining speed was distance between homes and broadband exchanges; homes more than 2km away were much slower. Ofcom added that under a new code of conduct agreed by 50 of the UK's 200 ISPs, firms should inform potential customers of the likely speed they would receive in their home.

However consumer groups demanded the companies change their advertising to reflect their actual service – and accused them of deceiving the public. Matt Bath, technology editor at Which? said: "UK broadband is simply not up to speed, and it's outrageous that ISPs can make sky-high claims when the reality is that many consumers are getting far from stellar performance. Our own research has found a huge gap between advertised broadband speeds and the actual speeds users can achieve – in the worst case, we found customers promised up to 8 Mbp/s achieved just 0.09 Mbit/s."

In its Digital Britain report, the Government said it wanted all UK homes to have access to 2 Mbit/s broadband by 2012 to ensure Britain leads the information revolution. At 2 Mbit/s, a music track takes 21 seconds to download; at 8 Mbit/s it takes 5 seconds. For a low-quality film, the difference is 52 and 13 minutes.

To check current speeds, Ofcom commissioned the specialist company SamKnows to check the rates delivered by the nine biggest providers – AOL; BT; O2; Orange; Plusnet; Sky; TalkTalk; Tiscali; and Virgin Media, which account for 90 per cent of all broadband connections. Hardware installed in 1,600 homes checked the response rate at all times of the day; 60 million checks took place between last November and April 2009.

Ofcom found that speeds were significantly lower in the evening; average speeds between 8pm and 10pm were 3.7 Mbit/s. Rural homes received significantly slower speeds (3.3Mbit/s), than city homes (4.6Mbit/s).

Ofcom said 83 per cent of customers were satisfied with their broadband service, but of the 9 per cent that were dissatisfied, speed was their biggest complaint. Acknowledging the particularly poor performance of some companies, Ofcom said: "Our research found small but significant differences between the performance of individual ISPs over the period we conducted the research, largely driven by the technology employed and capacity of the networks."

It said advertising was a matter for the Advertising Standards Authority (ASA). The ASA said the use of the words "up to" were acceptable for services where some customers did not receive the maximum level.

Steve Weller, marketing director at price comparison service uSwitch.com, said the report was "damning" of the broadband companies. "They obviously get away with misleading customers with their 'up to 8 meg' – customers either never receive 8 meg and most customers get much lower than the advertised speeds," he said.

"There should be two different price levels; one for customers that can get greater than 4 meg and one for people who can get less than 4 meg. People in rural areas in particular are being treated like second-rate customers."

Despite requests, neither BT nor AOL provided a comment. Tiscali said it was moving all its customers on to a superior service run by TalkTalk, its parent company.

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