Ofcom set to launch broadband crackdown

[Wee Gordon]

Ofcom set to launch broadband crackdown


Ofcom, the telecoms and media regulator, is poised to crack down on broadband providers that frustrate consumers trying to switch to different suppliers.

With up to 5 million broadband customers - about half the market - interested in switching providers, the tortuous process has been identified as a potential barrier to competition.

The UK broadband market has boomed over the past year with prices coming down dramatically and a range of strong competitors entering the market. There are now 10.7 million broadband homes, and customers can choose to get their service from companies as diverse as BT, Carphone Warehouse, BSkyB and even Tesco. However, Ofcom is concerned customers looking to take advantage of cheap deals are being frustrated by the protracted process of switching supplier.

The regulator launched an investigation into switching difficulties earlier this year and may publish its proposals as early as next month. Its aim is to make switching as straightforward as possible but it is also keen to ensure that consumers are protected from mis-selling, where unscrupulous providers sign up customers to broadband services without their knowledge.

"Switching broadband is a real pain. From a consumer perspective, this is not acceptable," said Chris Williams, a product manager at the price comparison service uSwitch.

USwitch research shows about half of the UK's subscribers are looking to change provider.

Operators argue that switching a customer between rival networks is lengthy and complex. Yet much of the frustration is not related to the technical migration of a customer but to the intransigence of the supplier in helping the customer leave. BT, which has the largest broadband network in the UK, said on average customer migration takes five days at the technical level, but some customers find switching takes weeks or even months.

Customer service issues have also slowed down connections. Carphone Warehouse and Cable & Wireless have both struggled to deal with customer demand for cheap broadband.

In order to switch broadband providers, the onus is on the customer to request their supplier to give them a Migration Authority Code (MAC). The code was established to protect consumers from mis-selling, but some suppliers have used it to deter customers from moving to a rival. Once the broadband supplier becomes aware a customer wants to switch, it can offer generous promotions or extra services to induce the customer to stay. In some cases, suppliers drag their heels supplying the MAC as they have little incentive to help the customer switch.

USwitch's Mr Williams said: "They will make it very difficult to get that code. A lot of people stop at that point, given the hassle involved." However, an AOL spokesman insisted: "It is not in any internet service provider's interest to make it difficult to switch as customers migrate to us, too. We are all in the same boat."

Internet providers must supply the customer with the MAC within five working days. Ofcom might decide to force providers to provide the code on the spot.

Ofcom also needs to address the continuity of service for customers switching to providers that have put equipment directly into BT's local exchanges. With companies including Carphone Warehouse, Sky and Wanadoo all investing in the exchanges, switching suppliers becomes technically more difficult. The increasing number of bundled products also presents more complex switching issues.