UK - Broadband providers will be brought under tighter regulation from the Advertising Standards Authority

[nma] Fixed and mobile broadband providers are bracing themselves for a sterner regulatory regime regarding how they can advertise their services as regulators prepare a crackdown on service claims.

The move has been prompted by the increased popularity of devices like the iPhone and services like the BBC iPlayer, which are squeezing network operators’ ability to keep up with demand.

Lynsay Taffe, communications and policy manager at the Advertising Standards Authority, said the body is launching a comprehensive review of how internet services are marketed. The review will be carried out with the British Code of Advertising Practice and Committee of Advertising Practice as these bodies can dictate policy, while the ASA is only permitted to adjudicate on specific cases.

“We’ve looked at a number of complaints about individual ads in the telecoms sector regarding access speeds and usage limits and found that applying a single policy to how telecoms providers advertise can pose significant challenges,” said Taffe.

“It’s important that we look at this on a broader policy level with service providers, other regulators and consumer groups, rather than relying on individual ASA rulings that focus on a particular service on one platform,” she added. “Therefore, the ASA has invited CAP and BCAP to review broadband speed and ‘unlimited’ use claims.”

Mobile operators marketing their internet tariffs as ‘unlimited’ – even though they’re subject to ‘fair usage’ caps – came under increased scrutiny after O2 dropped the tagline from its advertising of the iPhone 4.

Jonathan Earle, O2’s head of consumer mobile, denied the change was prompted by regulators looking into how mobile internet services are marketed. “We’re going off the unlimited data message because the amount of use is unsustainable at the moment,” he said. “From now on, our caps will be much more transparent and we’ll let new users know when they approach their limits.”

The company’s current marketing campaign focuses on transparency.

Paul Goode, ComScore’s head of industry relations, expects the move to explicitly state caps on data use will be replicated by other operators. “This is the start of an industry-wide trend we’re seeing ahead of the expected increase in the number of users purchasing smartphones and mobile internet packages,” he said.

Vodafone dropped the ‘unlimited’ tagline from its mobile internet ad campaigns last December ahead of its launch of the iPhone, following feedback from consumers.

A Vodafone spokesman said, “Since last December we’ve got rid of the ‘unlimited’ line from all our internet packages, whether it’s on a phone or with a dongle. It’s confusing for customers to get sold an unlimited package and then have to get used to a ‘fair usage’ policy.”

But complaints over the marketing of internet access aren’t restricted to mobile internet caps, as consumers start to consume more bandwidth with online services.

Ceri Stanaway, principal researcher for broadband at Which?, said, “We’re researching consumer attitudes to internet services and finding that, with more people using multimedia services online, it’s harder for operators to keep up with demand.”

She also cited a 2009 Which? study of 11,000 broadband users in which 11% of respondents claimed their ISP had contacted them about “excessive” network use even though the tariff they signed up to was marketed as unlimited.

“It’s entirely possible that figure would have risen by now,” said Stanaway. “With people using their PCs for things like iPlayer, pressure on the networks can only have risen.”

Sky Broadband changed the marketing of its online access after customers reported that service provision didn’t always meet with how it was advertised.

Lucian Smithers, Sky Broadband’s director of brand strategy and communications, said, “Consumers are confused and don’t 100% trust what they’re told about their broadband speeds. It’s an area where there’s an underlying bad perception of the service providers.”

new media age contacted ISPs TalkTalk and Virgin Media but neither was able to provide a response before this issue went to press.

Broadband brands drop ‘unlimited’ claims