Wednesday, 29 October 2008

ISPs / mobile networks: top speeds, "unlimited" usage - & consumer rights

Many ISPs in the UK try to win customers by claiming to offer:

  1. Broadband speeds - "up to" (some big number) Mbps download speeds, and
  2. Usage allowance / bandwidth - "unlimited" usage of their service i.e. downloads and uploads.

In both cases claims like these, which are very commonly found in advertising, marketing or promotional material, are misleading to consumers, because in practice:

  1. Few customers can in fact achieve the top advertised "headline" speed trumpeted in the Internet service provider's marketing material.

    Translation of "up to X Mbps": a handful of customers manage to get this speed so you'll be darned lucky if you can get that matey, but that's the number we're putting out there anyway, to get you to sign up with us.
  2. ISPs often engage in bandwith throttling behind the scenes, where they deliberately slow down the download speed for certain applications like peer to peer file sharing e.g. BitTorrent, or impose a speed limit on you just because they think you're using their service "too" heavily (e.g. Virgin Media throttle broadband speeds; also it seems BT do too, they certainly used to throttle P2P use.)

    Of course, they don't generally tell the customer they're throttling that they're doing it.
  3. Upload speeds are often much slower than download speeds (e.g. through throttling) - yet few ISPs make it clear enough up front what their upload speeds are.
  4. Almost invariably the claimed "unlimited" use is immediately emasculated by the small print, which imposes so-called "fair use" restrictions (euphemism if there ever was one!) - where basically the ISPs say that, even though they promised you an unlimited service and got you to sign a contract tying yourself in to them for a whole year (or whatever) on the basis of their claims, actually it's only fair that you shouldn't make full use of the service you thought you were supposed to be getting.

    In other words, in practice they impose a bandwidth cap on their customers.

So, many consumers take out contracts with ISPs based on those claims, only to find that their actual allowed monthly Net usage is in fact not "Unlimited", but is "Unlimited (and in small print) 'subject to fair use'" (or "reasonable use", whatever that means (the issue and possible solutions were discussed at a BarCampLondon3 session on fair use in the mobile context, you can see the video if you're interested). They end up getting charged extra for their "excess" downloads, or find their speeds are much slower than the maximum headline advertised speed, or they get throttled down, or all of those! To add insult to injury, they're stuck with it as they've been tied into a 12 month contract or longer.

To make matters worse, as mobile phone network operators increasingly try to compete for customers by offering data / mobile internet services they're also increasingly making similar claims in their own marketing - particularly regarding "unlimited" use which is in fact limited.

A. High broadband speed claims

Misleading broadband speed claims have received the most media publicity - and still are, e.g. the recent ruling by the UK Advertising Standards Authority criticising Virgin Media's speed claims, which was highlighted by UK comms regulator Ofcom.

Probably as a result of the greater publicity, some attempts have been made by official bodies to protect consumers - see my report on the broadband speed claims position in December 2007.

Subsequently, while I didn't blog it at the time, in June 2008 Ofcom introduced a "self-regulatory" voluntary Code of Practice on Broadband Speeds (PDF) for residential products, which fixed line ISPs can sign up to (if they wish).

1. What does the Broadband Speeds Code of Practice say?

Under this code (to paraphrase Ofcom's own words), ISPs are supposed to try their best to:

  1. give prospective customers, at point of sale, an accurate estimate of the maximum speed that their line can support
  2. clearly explain that the actual speed is likely to be lower than this maximum and outline all the factors that can affect speed (and ensure all sales and promotion staff properly understand the products they are selling so they can explain to their customers the meaning of the estimates provided at the point of sale)
  3. resolve technical issues to improve speed
  4. offer customers who are given an inaccurate speed estimate the choice to move onto a lower speed package when estimates given are inaccurate
  5. provide consumers with information on usage limits and alert customers when they have breached them.

The good news - to date 43 UK ISPs, covering over 90% of broadband customers in the UK, have signed up to it. They're supposed to "try their best" to implement the measures set out in the code within 6 months after sign-up (see 6th Principle para 41 of the Code of Practice on Broadband Speeds ).

So you can:

  1. check the list of signed-up ISPs to see if yours is included)
  2. see Ofcom's advice for consumers on broadband speeds
  3. read Ofcom's FAQ, and
  4. read the code (or PDF version) or summary of the Code's 8 principles.

It's also useful to know that if you signed up e.g. for a 24 meg download package (offered by the likes of Be) and find that when they hook you up you can only get say 12 meg, you should be able to downgrade to their cheaper 8 meg package.

However, in my view there's some bad news too.

1. The Code only applies to fixed line ISPs, not data / mobile internet providers

Mobile network operators aren't covered by the voluntary code yet, see para 16, so Ofcom can't even tell them off if they mislead potential customers about speeds or usage allowances.

2. It's just voluntary "self-regulation" for ISPs

The Code is only voluntary "self-regulation". ISPs don't have to sign up to it. And they can effectively disavow it anytime they like, without penalty.

There's no comeback even if an ISP who agrees to follow the Code then breaks it. The ISP concerned can't be fined by Ofcom. A finger wave and slap on the wrist from Ofcom, tut tut ooh you naughty naughty boy, maybe (yeah that should really scare the ISPs), some bad publicity, perhaps - but ISPs have already had bad press about their real speeds/bandwidths not living up to advertised speeds/bandwidths, and if they're not bovvered by that, why should a voluntary Code make any difference?

Yes, I'm cynical about voluntary codes for ISPs. Why? Well, look at what happened with broadband migrations. Customers were supposed to be able to switch ISPs with minimal interruption to their Net service, but in practice the "losing" ISP dragged their heels and made it very hard for anyone to leave.

There was a "voluntary" code for that, too (the text of the old Broadband Service Provider Migration Code Of Practice is in Annex 4 of the Ofcom statement), but it just didn't work - so much so that eventually Ofcom had to officially regulate migrations by making a new regulatory rule, General Condition 22.

Even with the risk of being taken to task by Ofcom, some ISPs still cause problems with migrations - I know one of my previous ISPs did, and it wasn't even Prodigy (who were in the end fined for their continued breaches of GC22). To this day, Ofcom are on their own initiative monitoring the migration situation. And they're right to.

I'm worried that this voluntary code won't work either, and that all it'll do is just put off the time when Ofcom actually makes proper rules to protect consumers properly. Which, perhaps, may be why ISPs agreed to it?

3. Even as a voluntary code, it doesn't go far enough

It's not just that the Code is toothless, they've taken away the dentures too.

The code's been watered down by lots of "best endeavours" weasel words (instead of "will") all over the place - which basically means that the signatories are just signing up to something like this:

"We voluntarily agree (which means we can stop agreeing any time we like) that we'll try our best to do this, that or the other - but we won't actually guarantee (even on a voluntary basis only!) that we'll do it".

So they're not even agreeing to do certain more consumer-friendly things, but just that they'll try to do them.

The code omits important consumer protections - notably ones which the Ofcom Consumer Panel had asked for in their 2007 letter to Ofcom:

  1. that the code should be mandatory for all ISPs, and legally enforceable
  2. that ISPs should be required to contact the customer 2 weeks after installation to tell them the actual (rather than estimated) maximum line speed supported by the individual customer's line, and
  3. that the customer should be able to switch packages without penalty and, if the actual maximum line speed is significantly lower than the package they signed up for, also have the option to terminate the contract penalty-free and move to another broadband provider.

Now the Code does say that ISPs should offer you the chance to change to a lower speed package if your actual speed is "significantly" lower than the estimate you'd been given (see para 31 a iv). But it ought also to say that disappointed subscribers should be offered a lower price package; I assume lower speed means lower price, but that really should be spelled out (especially given that Ofcom felt it necessary to spell out "comply with the spirit" and "don't abuse the trust of vulnerable consumers"! See 4 below for more on that).

The failure to include point 3 is particularly disappointing. If, wanting high speeds, you signed up for what you thought was a 8 MB service, and you only got 2 MB, would it really be much consolation to find you're stuck at 2MB for a year, even at a lower price? Personally, I'd want to move ASAP to an ISP that provided a true 8 MB service at the same or even higher prices.

(The OCP also suggested that Ofcom’s website should give information to consumers on how home broadband setups can influence the speed consumers actually receive can influence the speed they actually receive, in the form of a clear checklist of potential problems within the consumer’s home that can slow down their broadband speeds, explaining to consumers how to check factors such as wireless networks, low quality wiring, interference from electric appliances and the speed and health of their own computer, and how to make any necessary changes to improve their broadband speeds. However, Ofcom don't seem to have taken up that suggestion even though they're not averse to producing consumer guides as such, e.g. their guide to mobile roaming.)

Despite the Code's shortcomings, the Ofcom Consumer Panel welcomed the code and told ACE that it felt "that its views were taken into account when Ofcom drew up the Code of Practice with ISPs. We were not otherwise consulted, but were shown the Code of Practice before it was published."

4. Is something not quite right, in fact?

I was taken aback, and found it somewhat alarming, to see that, even in a purely voluntary code, Ofcom should feel it necessary to spell out (my emphasis) that :

  1. " honouring not only the letter but the full spirit of this Code, words, terms or provisions should not be so narrowly interpreted so as to compromise the ISPs’ commitments. Specifically, ISPs should use common sense in abiding by and interpreting this Code." (para 8)
  2. ISPs should "use their best endeavours to procure that all of their representatives" should "Not abuse the trust of vulnerable consumers or consumers that otherwise appear uninformed about their services or products e.g. those who are elderly or whose first language is not English".

Something just doesn't feel right about that. If it's only voluntary, why should ISPs need to be asked to keep within its "spirit"? As it's not a legally-enforceable rule, there's no sanction even if they don't follow its letter, never mind its "spirit".

To me, it's a disturbing sign of something very, very wrong with sales and marketing practices in the ISP industry that Ofcom should actually consider it necessary to warn them not only to abide by the spirit of the Code, but also to use their common sense (when it's not even Stupid Aid Week) and not to abuse the trust of vulnerable consumers! If Ofcom feel that they have to say that, surely matters have gone beyond the stage where they can be repaired by a voluntary code - isn't a mandatory, legally-binding rule what's truly needed?

5. Next steps

At least Ofcom say they'll keep an eye on the ISPs, including "mystery shopping", to see how well they keep to the code. If they discover problems, I hope they won't wait too long before making formal rules to force ISPs to stop misleading customers.

The Ofcom Consumer Panel told ACE "The Panel is also happy to see that the Code contains provisions for monitoring compliance. You mentioned the likelihood of formal regulation; the Panel will be watching closely to see how effective the Code is in improving the situation for consumers, and we will not hesitate to call for formal regulation if the Code is shown not to be working".

It's good that "Within the next few months", Ofcom plan to publish "the most comprehensive broadband speed survey ever completed in the UK" involving millions of tests looking into how speeds and service varies by region, choice of ISP and by time of day. It'll be useful to have the comparative info.

But, to be truly useful longer term, that info has to be kept updated - do Ofcom intend to do that, will they have the resources to do so?

As you can tell, I am concerned that consumers may continue to be misled and taken advantage of until the ISPs are made to mend their misleading marketing ways, whether by formal Ofcom regulation or by some brave and persistent consumer willing to take them on in the courts.

Which leads me to what, if anything, consumers can do about it. I'll throw out some ideas in C below.

B. "Unlimited" usage claims

The next battleground will probably be "unlimited" use claims (as well as speed / use claims by mobile internet providers).

This issue's been topical for a while - see e.g. this video and slides from a 2007 BarCampLondon3 discussion on "fair use" in the mobile data context.

Recently there was thread on the Open Rights Group discussion mailing list criticising the practice and suggesting possible ways to tackle the problem.

Glyn of ORG drew attention to an October 2008 news report of research showing that (from original uSwitch press release; my emphasis):

"nine out of ten consumers do not understand the limits on their service. Some 6.2 million wrongly believe there is no cap on their usage, while one million have almost reached or exceeded their limit in the last year as a result of their confusion. suggests some providers are misleading consumers by stating that their packages are unlimited when in fact they are not, as fair usage policies allow them to place caps on a customer's service if their usage is deemed to be excessive."

However, unlike with broadband speed claims, the powers that be really don't seem to want to clamp down on "unlimited" usage claims made by ISPs or mobile phone network providers.

ASA. For instance, just last month the UK Advertising Standards Authority said Vodafone's "Unlimited" ads didn't violate the CAP code because:

"the ads made clear that a fair-use policy applied to the service and the level at which the allowance was set. We noted the information provided by Vodafone demonstrated that only a very small proportion of their customers had exceeded the fair-use policy limited and that action was likely to be a request to moderate their usage in the first instance. We acknowledged that the vast majority of customers used only a small amount of the available allowance and concluded that the existence of a fair-use policy did not contradict the claim "unlimited mobile internet".

See Tom Morris's trenchant critique of Vodafone's arguments, which the ASA had unquestioningly accepted.

Let's put it another way - suppose a bank offered an "unlimited" overdraft, and in the fine print said it was subject to "fair use restrictions". So if you actually tried to overdraw over a certain limit, they'd say that actually you couldn't, even though it was advertised as "unlimited". And that it was fine for them to advertise it was unlimited because (unrealistically in today's climate perhaps) in fact very few people chose to overdraw by very much at all. Would that be all right?

Anyway, unless some brave soul wants to try for a judicial review to overturn the ASA's decision, that seems to be that.

The Broadband Speeds code does cover "fair use" to some extent - but only to ask ISPs to provide information on their websites about usage limits.

It says in this context (and I quote, with my own added emphasis and link, and some comments in square bracketed italics) that:

"33. ISPs must use their best endeavours to set out clearly, and in a prominent place on their websites (e.g. within help or FAQs sections), information relating to their respective policies on fair usage; traffic management and traffic shaping to cover, at a minimum, the matters set out below.

Fair usage policies and usage limits

34. The ISPs should publish, in a clear and easily accessible form, any criteria they use for determining breaches of its fair usage policy (e.g. total usage, specific percentage of users etc).

35. The ISPs should publish, in clear and easily accessible form, the actions they intend to take should a user exceed a usage limit or breach a fair usage policy (e.g. the size of any extra charges or nature of any speed restrictions etc).

36. Where it is reasonably possible to do so, ISPs should provide a means by which users can measure their usage over the relevant billing period.

[Definitely weaselly wordy - it is always "reasonably possible" for ISPs to provide users with a way to measure their usage, as all ISPs have to do is give their customers a link to download something like the free Netmeter.]

37. ISPs in possession of a user’s email address should provide users with email notification when users exceed a usage limit or breach a fair usage policy which informs users about the precise consequences of doing so, e.g. additional costs, information on speed restrictions imposed etc.

[Err, when would an ISP not have the user's email address? You have to give an email address when you sign up, even if you choose not to get email through their domain e.g. And, surely ISPs should be required to give the email notification immediately the limit's exceeded, not e.g. a month later when the poor user has racked up a fortune in extra charges?]

38. The ISPs should also consider providing advance notification to subscribers approaching a usage limit.

[Note, this means that the ISPs voluntarily agree, with no sanctions if they fail to do this, to try their best to consider providing advance notification. How hedged about and toothless is that?]

Traffic management and traffic shaping

39. Where ISPs apply traffic management and shaping policies, they should publish on their website, in a clear and easily accessible form, information on the restrictions applied. This should include the types of applications, services and protocols that are affected and specific information on peak traffic periods."

In practice, how readily available is that information? I'd be interested to know - I've not had time to check out various ISPs' websites to see.

Also, surely what's important is that this kind of important information should be given to potential customers before they sign up - or "at the point of sale", as Ofcom say in relation to broadband speeds.

Surely it's too late to find out, after you've signed up to a year's contract, that in fact you're restricted in how much you can use a service that you'd thought was "unlimited".

I also object to the phrase "fair use"; many people won't understand what that means in the ISP context because the ISPs' usage of that phrase undermines the natural meaning of those words.

Plus, "Fair use restrictions apply" or the like are usually in much smaller print in the ads, while "UNLIMITED" is emphasised. Which is definitely not fair on consumers, in my view.

C. Is there anything consumers can do?

Broadband Speed code. The Broadband Speed code, though voluntary, is out there now. So if you notice ISP advertising / promotional material or ISP websites that don't comply with the Code, whether on the broadband speeds or fair use front, and the ISP is on the the list of signing ISPs, you could report it to Ofcom (e.g. by phone, scroll down that page for the number), giving them the full details.

For starters, I very much doubt that ISPs "make reference to the Code within the sales process and provide a full copy of the Code through an easily accessible link on their respective website" (8th principle, para 44 of the Code) - Be Broadband certainly didn't when I moved to them recently, even though they signed the code. (I guess they're making the most of that 6-month period they've been given by para 41 of the Code to "use their best endeavours" to implement its measures!)

However, as mentioned it's purely a voluntary Code so there's little Ofcom can do about it. But if enough breaches are reported, maybe they'll finally make official rules about it, with teeth. We can but hope.

What else can consumers do? You may have rights under consumer laws too.

CPRs. Could the ISP concerned be reported to the Trading Standards authorities and perhaps too the Office of Fair Trading, on the basis that advertising "Unlimited" with smallprint "fair use" restrictions is misleading and an unfair commercial practice under the Consumer Protection from Unfair Trading Regulations? (see my separate post on the CPRs, which enable authorities to take action against those who trade unfairly).

The uSwitch research suggested that 90% of consumers are in fact misled.

However, it seems (see my CPRs post) that the enforcing authorities can if they wish effectively hand over their responsibilities to bodies like the Advertising Standards Authority.

Given that the ASA have already ruled that Vodafone's "unlimited" ads aren't in breach of their own code, resource-poor authorities may well point to that adjudication as reason enough not to take any further action under the CPRs themselves.

The ISPs can say that they've signed up to voluntary self-regulatory codes (i.e. the ASA's advertising codes - CAP Code and Broadcast Advertising Code - and the Broadband speeds code), so trading standards authorities shouldn't do anything further like take direct action against the ISP.

Of course, more people could complain to the ASA, but unfortunately given what they've said in relation to Vodafone they may not be willing to take any further complaints.

I don't know enough about this to know if there's any way of overturning the ASA's ruling. It's particularly disappointing that they've decided "unlimited" means "limited", when in the Vodafone case the complaints were actually from real live consumers. (In many ASA code breach cases, it seems that the complaints are often made by business rivals like other ISPs or mobile network operators!)

What if an ISP or mobile phone company has actually violated one of those codes? Could they be done for that under the CPRs (see my separate post)? Well, it'll only be a breach of the CPRs on their part if the commitments in the code were firm and "not purely aspirational".

Given that the Broadband Speeds code is hedged about with "best endeavours" (instead of "firm" commitments) all over the place, it seems virtually impossible for any ISP to breach that code in such a way that they could actually be held responsible for breaching the CPRs.

Is that why the Broadband Speeds code (which after all is purely voluntary and carries no penalty for breach as far as Ofcom is concerned) was watered down so much - in order that ISPs can use it as a shield against any accusations of breaching the CPRs? Who knows. Very clever of them, though, if so.

Unfair consumer contract terms? Would it be possible to say that the ISP's standard "fair use" restriction is an unfair consumer contract term and that therefore you as a consumer can't be held to it? (see the Consumer Direct, OFT and BERR notes on this area).

Usage allowance is probably a "core term" that generally can't be challenged, but couldn't it be said that "unlimited subject to fair use" has not been expressed in plain intelligible language (the widespread public confusion about it shown by the uSwitch consumer survey is surely proof enough that it's not intelligible), and therefore consumers can't be held to it?

Or could it be said that the "fair use" restriction is a term which tries to exclude the legal obligation of the ISP to provide an "unlimited" service, and therefore the consumer can't be held to it? (Complaints to Ofcom about unfair terms are not unprecedented.)

I don't claim to be a consumer law expert, I'm just tossing out a few ideas which may be worth considering if someone wants to have a go at taking things forward themselves. It'll be interesting to see how all this develops. I hope at least that this post will help to raise consumer awareness of the issues.


This post only provides general information and reflects my personal views and speculations on some of the issues raised; it is not legal advice of any kind.

If you have problems with your ISP or mobile network provider, you should consult a suitably-qualified expert in relation to your individual position e.g. at Consumer Direct, or talk to Ofcom etc - see BERR's list of consumer support resources.

1 comment:

Oli White said...

Hi Improbulus - thanks for a very thorough post.

At Be we know that many broadband providers are offering "super-fast" broadband, but very few actually deliver on that promise. Be strive to be the antidote to this by offering all customers a speed estimate before they sign up, on a network that doesn't just offer "up to 8meg speeds" but the opportunity to get "more than 8meg".

We work to be transparent and fair about speeds; we are already working to add the speed estimate into our order pages that will be live in the next few weeks. We also had a speed tester on the front page of our site at since August this year. So that your readers are aware, this tester estimates the speed you will actually get when you go with Be.

With regard to "unlimited" services as we offer, as our recent blog post shows, being in the same pot as some other ISPs that do not quite have the same definition as we do makes us a bit uncomfortable, especially as we think we a rather fair usage policy:

We also gave our thoughts about the Ofcom Code here:

Many thanks,

Oli White
Head of Marketing, Be Broadband