The ASA (Advertising Standards Authority) and CAP (Committee of Advertising Practice) have released their guidelines for the advertising of broadband speeds and ‘unlimited’ broadband packages, which will come into effect from 1st
April 2012. We discuss the details of the guidelines, the likely impact on end users and for the industry, and what they will entail for resellers.
[caption id="attachment_85" align="alignleft" width="75" caption="Darren Farnden, Head of Marketing"]
Let’s look at broadband speeds first. Currently, the usual practice is for ISPs to advertise the speed of the broadband service based on an ‘up to’ maximum speed achievable by that technology (e.g. ‘up to 24Mbps’ for ADSL2+ or ‘up to 40Mbps’ for FTTC). These headline speeds are supported by disclaimers (in small print), which explain that the actual speed achievable is dependent on the quality and length of the line. At the point of order the end user is then given further information based on their telephone number, which details the access technologies available to them (e.g. ADSL, ADSL2+ or FTTC) and the likely maximum speed they will be able to achieve.
The ASA and CAP believe that this practice is confusing to end users and that further clarification is required. Therefore they are bringing in new guidelines which will require all ISPs (with the exception of mobile providers) to demonstrate that their advertised headline speed is achievable by at least 10% of their customer base. Furthermore, these figures must be reviewed every six months. An advert must also include a warning that reminds the end user they may not actually achieve the advertised speed and that other factors can affect the service, such as length of line.
This has an obvious impact on resellers. The guidelines provide little clarification on how these changes would affect a provider/reseller model. The simplest option would be to allow resellers to quote the same speeds as their provider. However, we believe that practice may fall foul of the new guidelines and instead the reseller will be required to calculate their own advertising speeds, based on their own customer database and not the database of their provider. We are currently awaiting clarification of this point from CAP.
For example, the guidelines state that if an ISP runs a national campaign, the speeds quoted must be reflective of the national customer database. Alternatively, if they run a regional campaign, the stats should be reflective of the qualifying customer database. Essentially that means it would be possible for end users to receive two differing headline speed quotes from the same supplier. Therefore, in theory, if a reseller simply quoted the same headline speed as their provider, they would not be quoting a speed representative of their own customer database and would breach the guidelines.
This could be further complicated where the reseller uses multiple providers, as they would need to advertise separate headline speeds for each provider. The providers would then need to make the required reports and tools available to their resellers to enable them to calculate these speeds and regularly review them, as is required by the guidelines. We are already in the early discussion stages with our programming team to ensure such tools and reports can be made available via our online partner interface, synergi
Although we commend the ASA and CAP for attempting to protect consumers from potentially misleading broadband advertising, we believe these guidelines will actually confuse them even further. End users are currently provided with an ‘up to’ headline speed reflective of the access technology and supported by the relevant disclaimers regarding line length. They are then provided with availability checker information at the point of order. The ASA claims that this is already confusing to end users. Under the new guidelines, end users could potentially be exposed to various adverts quoting differing speeds – for what they can expect on a regional or national basis, and from several different suppliers. They will also be shown a warning message, advising them that they may not actually receive the quoted speed and that this speed is representative of just 10% of the provider’s customer database. Even those within the industry could struggle with all of that – talk about information overload!
The guidelines could also have serious implications for resellers who have a significant share of their database located in rural areas. Despite the fact that the services they sell are exactly the same as those from a similar reseller using the same wholesale provider, but with a national or predominantly urban based customer database, they will be forced to advertise lower speeds, making them appear inferior to their urban area-serving competitors. Such practices are likely to put many resellers off advertising completely, which could cause even further confusion to consumers as vital speed information could be missing.
As we stated in one of our previous opinion articles (Opinion: Broadband advertising review- as simple as A, B or C?
) we would prefer an approach that highlights the high volume, high contention ISPs, as this is where a lot of customer discontent lies. We suggested that ISPs be required to show the percentage of users that achieve a meaningful percentage (e.g. 90%) of their sync speed as throughput. This would highlight where end users are likely to experience poor service because of highly congested networks. End users that have signed up to low cost broadband services from high volume ISPs have suffered on highly congested networks, which have left them with significantly compromised speeds. This method would highlight these providers more effectively and so help end users to make a considered decision.
Potential for abuse
The guidelines from the ASA and CAP are also open to potential abuse and could in fact negatively affect the digital divide the government is so keen to close. For example, ISPs could reject orders from customers who will experience low speeds due to their rural location in order to protect and maintain their advertised speeds. Ultimately, this could mean less investment in the infrastructure within rural communities and an increased digital divide.
Recap on resellers’ responsibilities
To recap, when the new guidelines come into effect, resellers will be required to advertise headline speeds based upon the speeds achieved by 10% of their own
customers and must include a warning (within the body copy for non-broadcast marketing – no small print) that explains that the end user may not achieve this speed due to limiting factors such as line length. The reseller will need to calculate the advertised speed themselves and wholesale providers will need to make the required information, reports and tools available to them so that they can. Such speed quotations must also be prefixed with an ‘up to’. Non numerical speed claims, such as ‘superfast’ must also be qualified and would be reviewed on a case by case basis by the ASA. These guidelines apply to both download and upload speeds. Entanet is already considering the tools and reports that will be required and will make these available to partners via synergi
. Further communications will be sent to Entanet partners to explain these requirements in the form of partner update emails as the deadline for implementation approaches.
‘Unlimited’ broadband packages
So, what of the guidelines covering the advertising of ‘unlimited’ broadband packages? All of Entanet’s current BT-based broadband packages have clearly stated inclusive monthly allowances and we do not currently offer any unlimited broadband packages. However, where our resellers offer and advertise ‘unlimited’ broadband packages, they will only be able to refer to them as unlimited where “no additional charge or suspension of service is incurred as a consequence of exceeding any usage threshold associated with an FUP, traffic management policy or the like and only where provider imposed limitations that affect the speed of usage of the service are moderate only and are clearly explained in the market communication”.
Similar claims e.g. ‘limitless’ will be assessed on a case by case basis against the same criteria as ‘unlimited’ claims. The term ‘moderate restrictions’ is defined as “not contrary to the average consumers’ expectation of a service advertised as unlimited and should not hinder the user to carry out lawful online activities such as streaming content at or close to the consumer’s normal connection speed”.
However, ‘average consumers’ expectation of a service’ needs defining in itself, leaving this open to interpretation. What is clear is that, wherever a package is advertised as ‘unlimited’, the details of the FUP [fair usage policy] and/or any traffic management policies need to be very clearly stated in non-technical language.
Many parties within the industry were expecting the term ‘unlimited’ to be banned completely, unless of course the service was truly
unlimited, but these latest guidelines fall short of that. Instead, they require providers to be more open about FUPs and traffic management, which we feel can only be a good thing.
To conclude, we applaud the ASA and CAP for their attempts to protect consumers and prevent them from being misled, but we feel these latest guidelines will actually cause further confusion and could potentially have a negative impact on the digital divide in the UK. We aim to develop a number of tools and useful reports to help our channel partners calculate their 10% speeds for advertising, but feel that these guidelines are likely to put a lot of providers off advertising altogether and could lead to speed information being withdrawn completely. Entanet partners will receive further communications on this subject via email.
Updated: 11th October 2011
We have now received clarification from CAP which confirms that ISPs must ensure the speeds they quote are representative of their own customer databases and therefore if a reseller partner targets a specific area or uses multiple suppliers, they will need to calculate the speeds they can advertise at themselves. Entanet is currently discussing the tools and reports it will need to provide to reseller partners to make this achievable.
Have your say!
What are your thoughts on the new ASA and CAP guidelines? Do you think they have gone far enough with regards to ‘unlimited’ packages? Do you think the new speed guidelines will cause confusion or provide clarity? Let us know your thoughts by leaving us a comment below.