Procurement · 31 October 2016

Small firms set to benefit from broadband advert regulation

New broadband advert regulation will require providers to show all-inclusive upfront and monthly costs

Britain’s business owners are less likely to be misled by broadband adverts, as new regulations have demanded internet providers be clearer about contract costs.

According to changes introduced by the Advertising Standards Authority (ASA), the UK’s advertising regulator across all media, broadband suppliers will from now on have to show upfront and monthly costs in adverts, without separating out line rental prices.

New broadband advert regulation come after research from ASA and regulator Ofcom found that, in 2015, most UK broadband users couldn’t accurately calculate what they owe providers based on the information in various adverts.

Broadband users were “likely to be confused and misled” by price claims made in adverts, the ASA research concluded.

Under the new compliance rules, providers will also need to give greater space in advertising to the length of contracts, and upfront costs users would need to bear along with post-discount pricing.

The regulator’s chief executive Guy Parker said: “The effect should be a real positive difference in how consumers understand and engage with ads for broadband services”.

The move will likely be welcomed by UK businesses, but telecoms experts gave claimed the new broadband advert regulation didn’t go far enough.

Head of telecoms brokerage Equinox, Dave Millett, said that ASA needed to do more to help users know what they’re getting get in terms of broadband speed before signing contracts. The ruling also does little to address poor broadband infrastructure, experienced across the UK.

Millett added: “Whilst this is progress to a degree, it creates a problem for those people who want to buy broadband and phone lines from different suppliers.

“It also does nothing towards the misleading adverts on the speed of broadband, where suppliers can quote speeds that only 10 per cent of their customers get”.

Many small UK business owners struggle to access broadband that is both cost efficient and fast enough so that a venture can be productive.

A report from a cross-party committee of MPs earlier this year suggested business was at risk of losing out due to the commercial interests of UK-wide telecoms firms like BT.

Small businesses, particularly those located in Britain’s many business parks, have failed to benefit from BT expanding its superfast broadband infrastructure.

“Businesses often may already be using expensive dedicated leased lines, and so there is a motive for suppliers not to make more generic provision available to surrounding businesses, even though fibre-optic broadband,” the report’s authors concluded.

Welcoming ASA’s latest ruling, digital and culture minister Matthew Hancock said: “Making broadband providers show all-inclusive, upfront prices in their advertisements means users will be much better placed to make an informed choice when deciding on a service.”

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Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.

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