Broadband providers ordered to come clean in adverts

Internet service providers (ISPs) have just a few weeks to sign up to a voluntary code on the promotion of broadband speeds or the industry will face mandatory regulation, the communications watchdog has warned.

Consumers' average web connection speed was less than half its advertised rate, and only 42 per cent of customers received the maximum promised speed, according to study by the price comparison website

Attempts to set up a voluntary system providing consumers with accurate information were failing, Ofcom's chief executive Ed Richards told a parliamentary select committee. "This is a near-term issue that needs to be dealt with now and we would like to be able to get the industry to sign up within the next few weeks," he said. "But I am not sure we can and if the providers do not agree we will have to move to a mandatory code, which will take much longer when we want to move quickly."

BT, the UK's largest broadband provider, said it backed the plan. "We believe the most important thing is transparency when a customer orders a broadband service," said a spokesman. "BT Retail always tells the customer what speed of service they will receive before they place the order and we believe that other companies should do the same."

But while no ISP will admit it is bucking the consensus, agreement is yet to be reached. "Everyone is keen but no one wants to take the lead," said one industry insider. "It is the smaller operators that are most exposed – if you are small and you can lie about your speeds you are going to do well, but you will have a problem when you are forced to be transparent."

Tony Wright MP, a member of the business and enterprise committee, said Ofcom needed to be robust. "Not long ago, constituents were concerned they couldn't get broadband, now discussion has turned to the speed of the connection and there is growing dissatisfaction," he said.

The survey found that consumers buying a package offering connection speeds of 16Mb or faster typically saw speeds of 8.6Mb, while people supposedly getting 8Mb were most often receiving 3.4Mb.

The issue is that individual premises receive different speeds based on the distance to the local exchange. Some critics of current practices advocate a system whereby all premises are line-tested when a customer signs up for a broadband package, providing an accurate gauge of the top speed that is technically possible from that property.