Ofcom launches new broadband code to protect UK SMBs

Ofcom has launched a new code of conduct for broadband providers, ensuring that UK SMBs receive clearer information on internet speeds before they sign a contract.

The code is voluntary, but signatories agree to provide accurate and transparent information to businesses, as well as manage any problems customers have with broadband speeds.

It also means customers can exit contracts if speeds fall below a minimum guaranteed level.

Sharon White, Ofcom chief executive, said: "Ensuring consumers get the best possible communications services is Ofcom's top priority. And that includes businesses getting the broadband speeds they need. Yet too many buy unsuitable broadband packages because of confusing or insufficient sales information, or are hampered by slow speeds after they've signed on the dotted line.

"Where broadband companies fail to provide the speeds they promise, we've made it easier for businesses to walk away from their contracts without penalty. Providers have also agreed to give clear and reliable speeds information upfront so business customers can make more informed decisions."

So far, seven of the UK's top broadband providers for businesses have signed up to the code, including BT Business, Daisy Communications, KCOM, TalkTalk Business, Virgin Media, XLN and Zen.

In response to the introduction of the new code, Peter Kelly, managing director of Virgin Media Business, said: "We welcome Ofcom's initiative to provide better protection to small businesses by introducing a code of practice that ensures they receive the service expected.

"Virgin Media Business is proud to be a signatory of the code and we're committed to helping SMEs achieve their full potential by offering the UK's fastest, widely available business broadband speeds."

The code has been brought in to tackle what Ofcom called a "speeds gap" between what customers think they are buying and what they actually receive from providers.

A third of SMBs are oblivious about how fast their internet connection actually is, and half admit to experiencing problems with broadband speeds.

Meanwhile, slow internet speeds could account for 15 minutes of lost time per day, according to a new study into the effect of poor connections on SMBs from Virgin Media Business.

"A dependable broadband connection is now essential for almost every aspect of modern business life," said Mike Cherry, policy director for the Federation of Small Businesses. "The new Code of Practice announced by Ofcom is a timely and well-targeted intervention in the business broadband market.

"To plan effectively, firms need accurate information on what speeds they can expect, and how much this will vary. Business owners should be able easily to compare suppliers and exit a contract early if their communications provider does not deliver the speeds promised."

The Ofcom Code comes into effect from 30 September 2016, with all business broadband providers invited to sign on.