SMBs will be able to ditch slow broadband services without incurring any penalty if providers fail to deliver promised speeds, under new rules introduced by Ofcom.
“ISPs will offer customers, at any point during the contract, a right to exit the contract without penalty if download speed falls and remains below a minimum guaranteed access line speed," the code states.
Ofcom gave the example of an SMB buying an advertised broadband package of 17Mbps and then being given a personalised estimated download speed of 11.3Mpbs-15.6Mbps, with a guaranteed minimum of 7Mbps.
If the actual speed achieved is lower than 7Mbps and remains so after the ISP and the company have tried to fix the problem, the SMB will be able to exit the contract without penalty.
The changes are due to come into force by September 2016 and so far seven ISPs that provide connections to two-thirds of SMBs - BT Business, Daisy Communications, KCOM, TalkTalk Business, Virgin Media, XLN and Zen - have signed up.
Mike Cherry, policy director for the Federation of Small Businesses, welcomed the code, saying that good quality internet is the lifeblood of many SMBs.
"The new Code of Practice announced by Ofcom is a timely and well targeted intervention in the business broadband market,” he said.
"A dependable broadband connection is now essential for almost every aspect of modern business life. Everything from driving online sales, customer relations and accessing data held in the cloud relies on a stable broadband connection.”
The new code will also require providers to be more upfront about the speeds a business should expect to receive before any contract is signed.
“ISPs will provide estimates of expected download and upload access line speeds (and throughput speeds, where available) as early as possible during the sales process and in any event prior to the customer agreeing to purchase the service,” the code states.
Sharon White, Ofcom chief executive, explained that it was high time ISPs were held accountable to clearer targets and requirements when providing internet services.
"Where broadband companies fail to provide the speeds they promise, we've made it easier for businesses to walk away from their contracts without penalty," she said.
"Providers have also agreed to give clear and reliable speed information upfront so business customers can make more informed decisions."
The move comes during a week of intense debate around broadband. Earlier this week over 100 MPs called for Openreach to be split from BT to improve the state of the UK's broadband.
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