Broadband firms face fines for failing to help customers switch

Ofcom has threatened to punish broadband companies that make it difficult for consumers to switch supplier after setting a series of ground rules for providers of high-speed internet.

The rules come into effect from Valentine's Day next year. Suppliers that are found to be in breach of the regulations, and do not respond to Ofcom's demands to refund frustrated consumers, could face penalties of 10 per cent of their revenue.

Up to 5 million broadband customers are interested in switching suppliers after a series of companies entered the market with attractive offers. However, Ofcom said the frustrating process of switching supplier was a potential barrier to competition.

To switch broadband provider the onus is on the customer to request the existing supplier provide them with a Migration Authority Code (MAC). Some suppliers have used the code to deter customers from moving to a rival by offering generous promotions or additional services to induce the customer to stay. Others have been accused of dragging their heels supplying the code as there is little incentive to help the customer switch. In some cases customers can be left with no broadband service.

Ofcom has made it mandatory for suppliers to supply the MAC code, free of charge, to the consumer on request. That also applies to wholesale providers like BT and Cable & Wireless. Ofcom has also established a set of high-level obligations to which suppliers must adhere to ensure that switching is as quick and convenient as possible.

BT has also set up a help desk designed to assist consumers who cannot sign up to a new broadband deal after moving premises due to an existing broadband connection remaining active at the address. Although this often proves to be a complex technical issue related to the broadband line it has provoked the highest number of complaints to Ofcom.

The rules will come as a blow to Orange, which had planned to charge its users £12 if they asked for the code more than once.

Price comparison service uSwitch said the MAC code issue had reached crisis point. Steve Weller, head of communications services, said: "The new rules fail to go under the skin of the MAC code and address - let alone resolve - the true issues they present to the broadband industry."

An Ofcom spokesman said all broadband providers would be subject to the high-level obligations and that it would be meeting suppliers to work through technical and operational issues related to switching suppliers to consider potential problems related to new broadband networks.