Ofcom lets consumers terminate broadband contracts for lack of speed

Ofcom has also urged advertising regulators to develop a new measurement, 'typical speed range', on which fair comparisons can be made.

Research just published by Ofcom shows that the gap between the advertised speeds of broadband access and the actual speeds experienced by internet service provider (ISP) customers is growing.

A new code of practice on broadband speeds will give customers the right to leave their ISP without paying any contract penalties in the first three months of their subscription if their actual download speeds are far below the advertised speeds.

"[Under the code ISPs will] give consumers the option to leave their contracts early without penalty (within three months of signing up to the service) if they receive a maximum line speed that is significantly below the estimate they are given at point of sale and the ISP is unable to resolve the problem," said Ofcom in a statement.

Though average download speeds have increased in the past year, the increase in the advertised speeds has grown at a faster rate, Ofcom's research said.

"In April 2009, average actual (or download) speeds were 4.1 megabits per second (Mbit/s), 58 per cent of average advertised ‘up to’ speeds (7.1Mbit/s). In May 2010, average download speeds were 5.2Mbit/s, 45 per cent of average advertised ‘up to’ speeds (11.5Mbit/s)," said an Ofcom statement.

The new code of practice on broadband speed is voluntary and only applies to those companies which sign up to it, but Ofcom said that the country's biggest ISPs – BT, Talk Talk and Virgin – have all indicated that they would sign up to it.

Ofcom said that it was also seeking to take action on the advertising of broadband services to ensure that potential customers have a more realistic view of the likely quality of companies' services. It said that it has made two suggestions to advertising industry regulators the Advertising Standards Authority (ASA) and the Committee on Advertising Practice (CAP).

"We have recommended that speeds should only be advertised if at least some consumers are actually able to achieve the advertised speeds [and that] those who advertise according to 'up to' speeds, should also include a 'typical speed range' (or TSR) based on a standard currency to be developed, similar to those in other industries (for example, APR in financial services, and MPG in motoring)," said Ofcom in its statement.

“Actual speeds are often much lower than many of the advertised speeds which makes it essential that consumers are given information which is as accurate as possible at the point of sale; this is what the new Code is designed to deliver," said Ofcom chief executive Ed Richards.

The research found that services operated over fibre optic cables rather than copper phone lines, such as Virgin's, delivered "significantly faster" speeds compared to advertised speeds. It found, though, that cable services suffered a more severe slowing of speeds at busy periods than phone line based services.