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How Ofcom regulates business broadband
Ofcom, or the Office of Communications, is the UK’s communications regulator.
It was established by the Communications Act 2003 to ensure telecoms, broadcasting, and postal services offer high-quality, accessible, and affordable services.
As the UK’s telecommunications regulator, Ofcom is key in ensuring businesses receive the appropriate broadband service.
This article covers Ofcom’s role in the business broadband market and highlights how it can help businesses get the best broadband service possible.
Ofcom’s role in business broadband
Ofcom’s role is to ensure the business broadband market works for customers by being competitive and transparent.
The Communications Act 2003 gives Ofcom authority to regulate broadband providers and network operators through conditions, codes of practice, and other regulatory measures.
Here are those most pertinent to UK businesses who are having trouble or are looking to improve the performance of their broadband:
- Universal Service Obligation (USO)
- Business broadband provider complaints
- Broadband speed advertisement code of practice
- Transparency, contract terms
- Quality of Service
- Enforcing competition on leased line markets
Universal Service Obligation (USO)
The Universal Service Obligation (USO) is a key initiative managed by Ofcom to ensure that all businesses in the UK have access to a minimum standard of broadband services, regardless of location.
The two USO providers in the UK are:
These providers must offer a basic business broadband package if a company’s current broadband service meets the following conditions:
| Condition | Details |
|---|---|
| Current Speed | Existing connection provides less than 10 Mbps download and 1 Mbps upload speeds. |
| No Alternative Services | No other broadband options, like 4G/5G business broadband, offer the minimum USO speeds (Satellite doesn't count!) |
| No Planned Upgrades | No planned network upgrades within 12 months that would deliver the required USO speeds. |
| Cost Cap | Connection cost must not exceed £3,400; costs above this may require a customer contribution. |
| Location | Premises must be within Openreach's or KCOM’s service areas; otherwise, the USO does not apply. |
Businesses in rural areas without fibre coverage typically meet these conditions.
If you are not in an area served by the USO provide then consider a satellite business broadband deal that offers universal broadband coverage in the UK.
Business broadband provider complaints
If your business encounters issues with its broadband service, like slow speeds, billing errors, or poor customer service, Ofcom provides a clear path for resolution, as follows:
- Contact your provider: Ofcom expects you to report any issues directly to your business broadband provider. They are required to have a complaints procedure in place, and they are obligated to try to resolve the problem within a reasonable timeframe.
- Escalating the issue: If the provider fails to resolve the issue within eight weeks, you can escalate your complaint. This often involves requesting a ‘deadlock letter’ from the provider, which confirms that you’ve reached an impasse.
- Alternative Dispute Resolution (ADR): If your complaint remains unresolved, you can use one of the Alternative Dispute Resolution (ADR) schemes to investigate and recommend solutions. See what scheme your provider belongs to on the Ofcom ADR schemes webpage.
- Report to Ofcom: Ofcom reviews data on complaints to have evidence for any regulatory action if a provider is consistently underperforming.
Broadband speed advertisement
Ofcom uses a set of voluntary codes of practice, which includes broadband speed advertisement.
This code requires that businesses receive accurate and transparent information about their expected broadband speeds:
| Requirement | Details |
|---|---|
| Accurate Speed Ads | Advertised speeds must reflect what at least 50% of customers achieve during peak times. |
| Personalised Estimates | Providers must give location-specific speed estimates when signing up for service. |
| Right to Exit | Businesses can exit contracts without penalty if speeds consistently fall below estimates. |
| Transparency | Providers must inform customers of any changes to broadband speeds, especially reductions. |
Currently the only business broadband providers to have signed up to the broadband speed advertisement voluntary code of practice are:
Transparency, contract terms
Ofcom also helps businesses by mandating that providers are clear and upfront when advertising business broadband deals, especially when it comes to:
- Hidden fees: All costs associated with broadband services, such as setup fees, monthly charges, and potential penalties for early termination, must be included.
- Terms and conditions: T&Cs must be clear, allowing businesses to comprehend their rights and obligations in their business broadband contract.
If you feel your provider is unfair or deceiving, you should consider filing a complaint.
Quality of Service
Another of Ofcom’s key tasks is ensuring providers offer the best service possible with the technology available. This is done by setting minimum standards of service. Notable examples include:
- Minimum performance: Setting minimum performance standards (e.g. business broadband speed, latency, etc) for each broadband connection type (e.g. cable broadband, ADSL, full fibre and SoGEA).
- Repair times: Setting standards for repair times for service disruptions.
Ofcom ensure the Quality of Service of the entire broadband infrastructure across the UK, not just the services.
Enforcing competition on leased line markets
In its 2016 business connectivity market review, Ofcom identified a lack of competition in the leased line broadband market, which is crucial for providing high-speed business connections and public services.
As a result, Ofcom imposed new rules requiring Openreach to provide access to its dark fibre network. This enabled competitors to use its infrastructure more easily to deliver their services.
This has helped smaller providers like XLN, Onebill, Daisy, and Hyperoptic greatly improve their offerings. It has also led to lower business broadband prices and more business choices as new providers can more easily launch.
According to Ofcom’s 2018/2019 annual report, this move significantly contributed to a more competitive market, with businesses benefiting from a 13% real-term reduction in leased line prices between 2016 and 2019.
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