Ad authority force new standards on ISPs

31 October 2016, 12:00   By Samantha Smith

THE Advertising Standards Authority (ASA) have begun enforcing new regulations on broadband ads, requiring internet service providers (ISPs) to combine the cost of broadband and line rentals into a single monthly price.

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Active from Monday, this new ruling comes after research [PDF] revealed that customers were often misled by advertisements as to the total fees they'd have to pay for their broadband.

This was because line-rental and other charges were often hidden in the small print beneath the separate monthly cost of broadband.

Now, however, ASA's guidelines state that ISPs must advertise "all-inclusive up-front and monthly costs", as well as give "greater prominence" to lengths of contract and to any post-discount pricing.

This will make determining the value of an offer generally easier for customers, and it also opens the possibility that ASA and Ofcom may deliver a similar ruling regarding the advertising of broadband speeds.

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For now, it doesn't address these speeds directly. Instead, it stipulates three conditions that broadband ads must now meet regarding pricing and contracts:

  • Show all-inclusive up-front and monthly costs; no more separating out line rental
  • Give greater prominence to the contract length and any post-discount pricing
  • Give greater prominence to up-front costs (such as delivery fee, activation fee, installation fee)

The first of these mean that ISPs - as well as the price comparison sites (e.g. Choose) that compare them - have to combine the broadband fee and line rental fee into a single monthly charge.

Added to this, they have to make it clear to customers as to when contracts will end and what any post-discount or post-promotional price will be. Of course, it's not entirely clear itself as to how "clear" or "prominence" will be defined by ASA.

Nonetheless, their rules offer a considerable step-change in comparison to the previous state of affairs, in which ISPs could get away with advertising a seemingly low broadband price while burying additional rental charges and installation costs in the small print.

For instance, in Ofcom and ASA's own survey, they noted that 81% of customers "were unable to calculate correctly the total cost of a broadband contract when asked to do so after viewing an ad".

Worse still, they also found that only 53% of customers could identify the "total cost per month correctly when asked to focus on the deal ... after the 2nd look".

This shows just how necessary ASAs changes to the rules are, and just what a difference they should make to the industry.

As their CEO, Guy Parker, said, "From today, we expect to see a change in how broadband providers advertise their prices. The effect should be a real positive difference in how consumers understand and engage with ads for broadband services".

Hopeful precedent

Yet the implications of the new guidelines for improving understanding and making the broadband market more competitive don't stop there.

In fact, they also raise the hope that ASA and Ofcom will turn their attention to the advertising of "up to" speeds, which can be marketed by ISPs simply on the condition that 10% of their customers can attain them.

That there's a strong possibility of this is underlined by how, following on from their research into advertised prices, ASA and the Committees for Advertising Practice (CAP) are currently conducting research on whether the advertising of "up to" speeds confuse customers in much the same way that ads used to confuse them on price.

This is promising insofar as the guidelines on pricing and contracts followed on from the aforementioned research ASA conducted in November 2015.

It suggests that, if ASA and CAP find that a sizeable percentage of people are as misled on speeds as they were on pricing, then the Authority may indeed announce that they're looking into introducing new regulations on the advertising of speeds.

They already ruled once on this in 2011, when they demanded that marketed "up to" speeds must be accessible to at least 10% of an ISPs customers. Yet they themselves admit that even now "consumers might be misled by claims about speed in broadband ads".

And even if such regulations don't immediately follow once their new research is published "in the autumn", customers can at least take comfort from the fact that shopping on the basis of price has become markedly easier.

Some ISPs might be able to shift some of their fees to standalone installation charges, and it might become a bit trickier to compare providers who supply only broadband with those who supply both broadband and a line rental.

However, for the most part, because installation charges can no longer be hidden in the small print, customers will now able to compare ISPs more meaningfully than they have ever done in the past.

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