Ofcom is cracking down on broadband companies that use delaying tactics to stop customers switching to another supplier after receiving thousands of complaints from consumers. The regulations, which are due to come in to effect early next year, will make it easier for people to move between providers and stimulate further competition in the market.
The telecoms and media regulator has identified the broadband-switching process as a potential barrier to competition. It has been considering ways to make the process easier for the 5 million UK consumers looking to switch supplier. The regulator said switching suppliers had proved effective in most cases, but the problems some consumers encountered had been "serious and disruptive".
The UK broadband market has grown rapidly over the past year, with more than 11 million UK homes and businesses now connected to high-speed internet services. Companies such as Sky and Carphone Warehouse have entered the market to compete against established players including BT and Tiscali, yet some customers have been put off taking advantage of cheap deals by the hassle of switching and the risk of losing internet access for weeks.
Ofcom has proposed regulations around problem areas related to switching broadband companies. It plans to address the issue of companies dragging their heels in providing the customer with a Migration Authorisation Code (MAC). This was established to protect consumers from mis-selling and is required to switch providers. However, some suppliers have used it to deter customers from moving to a rival by offering promotions or additional services to induce the customer to stay once the code has been requested. Broadband companies have also been accused of making it difficult for consumers to access the MAC as there is no financial incentive to help the customer switch.
Ofcom will make it mandatory for broadband suppliers to provide a MAC to consumers on request. Most major broadband companies have already signed up to a voluntary agreement to supply the MAC within five working days, yet, because there is no formal obligation to comply, Ofcom cannot take action when companies frustrate consumers with underhand tactics.
Ofcom also wants a process for customers to obtain a MAC from a third party, possibly a wholesale broadband supplier. This could protect customers in cases where the broadband provider cuts off supply and cannot be contacted.
Earlier this year, customers of E7even, a broadband reseller, found their broadband had been switched off and there was no way to contact the company. Ofcom said its proposed regulation is aimed at ensuring situations such as this "do not happen again".
A third area that Ofcom proposes to address relates to the problems that some consumers have when moving house. Some have been unable to take up a new broadband subscription because of an existing broadband connection at the property, and resolving the issue can take months. An Ofcom spokesman said most complaints it has received relate to this issue. It said the matter was technical and it would work with broadband suppliers to resolve such problems.
A BT spokesman said the proposed regulation was "terrific" news. "BT has been pushing [for the] MAC to be mandatory for some time and would like the system to be extended to other products such as voice and dial-up internet," he said. Brian Sullivan, Sky's director of product strategy and management, said: "With instant savings available for many who switch, Sky supports Ofcom's objective of making it easier to join a new provider."Reuse content