Ofcom Plans Superfast Broadband Changes

Ofcom Plans Superfast Broadband Changes
Regulators have proposed new measures they say could lead to better deals for superfast broadband customers.

Ofcom is proposing to cut the costs paid by broadband providers when switching customers, and shorten the minimum length of contracts. It said it hoped the changes would promote competition among providers, who would then pass the savings on to customers.

Currently around 13% of broadband connections in the UK are superfast. Superfast connections are usually made through fibre-optic cables, providing speeds that are more than double the average for the UK.

In a recent report Ofcom said upgrading from slower connections was becoming cheaper, and is becoming increasingly popular among customers. But the regulator said switching between one superfast provider and another remained expensive.

Currently, providers who use BT’s superfast Openreach network must pay BT £50 if they want to switch a customer on to their service.  Ofcom said this charge is frequently passed on to the consumer.

BT said in a statement it welcomed the plan: “We are pleased that Ofcom is maintaining pricing freedom for Openreach’s fibre products. “BT has already accepted a long payback period for its fibre deployment and its wholesale fibre prices – which are amongst the lowest in Europe – reflect this”.

The new provider is also committed to paying BT to use the network for one year.

Ofcom is also proposing to cut the cost of switching to between £10 and £15, and reduce the minimum contract length to one month. It said the measures were designed to ensure that BT’s charges for access to its fibre network are “fair and reasonable”.

Marie-Louise Abretti, broadband expert at uSwitch.com, the price comparison and switching service, said she hoped price cuts would be passed on to households: “Targeting the market at wholesale level – offering monetary savings to broadband providers that are switching people – means it’ll be up to ISPs [internet service providers] to make sure that cost savings are passed on to their customers. “And with providers potentially saving up to £40 per customer, per switch, Ofcom must ensure this happens. We’d hope this move will see often hefty set-up fees scrapped, or at least reduced.”

European Internet ‘Running 25% Slower than Advertised’

European Internet ‘Running 25% Slower than Advertised’
Customers across Europe are getting broadband speeds 25% slower on average than that advertised by their service providers, a European Commission report says. The study suggests the average speed in Europe is 19.7Mbps. Service providers routinely advertise speeds “up to” a certain amount, which most consumers will not get.

The EU wants to get all households on speeds of at least 30Mbps by the end of 2013 and half on 100Mbps by 2020. The study analysed broadband speeds from nearly 10,000 households around Europe. It ran 75 million tests, generating three billion pieces of data.

Cable broadband services came the closest to advertised speeds, at 91.4%, while fibre users got 84.4% of advertised speeds. Beefed-up ADSL services fared the worse – getting just 63.3% of advertised speeds. This is because they are run on copper phone lines that offer slower speeds the further people live from the exchange.

The UK government has announced it wants to get fast broadband to 95% of the population by 2017 and will use wireless and 4G to extend this to 99% by 2018.

“Fast broadband is no longer a luxury and is now just as essential as a reliable electricity supply for UK consumers,” said Dominic Baliszewski, from website broadbandchoices. “We shall see exactly how realistic these targets are. With Ofcom putting current super-fast availability at 65% of the population, there is still a long way to go.”