Ofcom's threat to broadband providers over stricter rules

The communications watchdog is threatening to formally regulate broadband providers that do not give an accurate picture of the speeds customers can internet receive, after it found companies were falling short.

Ofcom first imposed a voluntary code of practice on broadband speeds in December 2008 and revealed yesterday that it had been "mystery shopping" to check that internet service providers (ISPs) were complying.

In the wake of the results of its anonymous survey, the regulator now proposes tightening up the code by the summer. "If agreement cannot be reached with the ISPs, Ofcom will consider whether it is necessary to introduce formal regulations," it said.

The research found that ISPs "are meeting some aspects of the code but are falling short in other areas". The voluntary code was imposed after the regulator found in July that many customers could not achieve the headline broadband speeds advertised by some companies.

Ofcom found that Virgin offered the best average speed of up to 8.7Mb on its "up to" 10Mb service, with Tiscali the lowest at up to 3.7Mb average.

Yesterday, the regulator said its research had found 85 per cent of mystery shoppers were given an estimate of the maximum speed on their broadband line before singing up. However, almost half of the shoppers had to prompt the companies for the speeds they offered, and three-quarters were not told that their speeds were likely to be below the maximum offered.

Some of those only gave a vague indication, saying customers could receive speeds between 10Mb and 20Mb, "which could lead customers to expect a much higher speed than they actually receive", the regulator said.

Ed Richards, chief executive of Ofcom, said there was "still significant further progress to be made", despite customers receiving more information than before. "We will continue to monitor and assess performances against the code in coming months."

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