skip to main content

Ovum view

Summary

The Advertising Standards Authority for Ireland (ASAI) has released new guidelines for advertising broadband and mobile phone services, which came into effect on September 1, 2019. The guidelines look at how operators can use certain terms to describe fiber, speeds, and coverage in their advertising. Ireland isn't the only country to look at these types of consumer protection measures; several other nations across Europe, including the UK, have tackled similar issues.

The use of the term "fiber" by part-fiber providers continues to be hotly debated

The ASAI has released new guidelines for advertising broadband and mobile phone services, which came into effect on September 1, 2019 and complement the existing ASAI code. The guidelines outline the general legal requirements for telecoms operators to follow when using marketing terms for broadband and mobile services, including terms relating to fiber, speed claims, coverage, and availability. For example, where it is possible to determine the actual speed delivered to users, if an advertised claim is based on an "up to" maximum attainable speed, advertisements must include the percentage of customers on the advertised plan that experience the "up to" speed (for at least 80% of the time). Where a provider offers limited geographical coverage, advertising in national media must include a prominent and transparent reference to this fact. If there are any other limitations attached to providing the service, these must also be referenced in the advertising. Crucially, the guidelines state that where the term "fiber" is used but the service is not provided on a full-fiber network, advertising must contain a prominent qualification that the network is "part fiber." The guidelines also include advice on information resources for consumers and requirements for advertisers to have evidence to demonstrate the accuracy of speed claims and to include indications in advertising that any terms and conditions apply.

The guidelines follow recommendations made by the Mobile Phone and Broadband Taskforce, which was set up to identify measures to improve access to quality broadband and mobile phone services across Ireland. The ASAI guidelines form part one of a two-part review of telecommunications advertising. Part two will look at the conditions in which words such as "unlimited" can be used.

The new guidelines go a long way in ensuring that telecommunication marketing terms are not used incorrectly to mislead consumers and that consumers will have greater clarity over what they can realistically expect to receive from their broadband or mobile phone package, which should help them make more informed decisions when purchasing these services. Consumer protection measures such as these have been receiving increased global attention. The Irish regulator is certainly not the first: several telecoms regulators have started to recognize the importance of addressing broadband pricing, speed, advertising, and data allowance problems.

For example, the UK recently changed the way broadband speeds are advertised. Previously, operators were criticized for potentially misleading customers by advertising top speeds that were only available to 10% of their customers. New Advertising Standard Agency (ASA) rules now state that operators can only advertise their fastest available speeds if they are accessible to at least 50% of their customer base. Additionally, in 2011 the ASA raised concerns over whether consumers could actually achieve "unlimited" usage of telecoms services as claimed in advertising. Providers were advised that if they want to use "unlimited" claims, they can no longer charge their customers or suspend their services for excessive usage and must ensure that various types of traffic management practices do not unduly affect customers' use of the service.

There has also been a long-standing dispute in the UK over the use of the term "fiber." However, the current approach taken by the regulator is very different from the new guidelines in Ireland. CityFibre launched a judicial review of the ASA's decision to allow slower "part-fiber" ISPs to use "fiber" terminology in their broadband adverts. Gigabit-capable "full-fiber"/FTTH/P providers such as CityFibre have long maintained that it is difficult for service providers in the UK to be able to highlight the advantages of a full-fiber connection over a part-fiber line when part-fiber rivals can use identical terminology, which they see as misleading. However, in April 2019 the English High Court of Justice dismissed the case. During the ASA's initial review, it found that "fiber" wasn't a priority identified by consumers when choosing a package: consumers did not notice "fiber" claims in ads, and they saw it as a buzzword to describe modern fast broadband. Most consumers also felt they would not change their previous purchasing decisions, even after the differences between part-fiber and full-fiber broadband services were explained to them. Therefore, unlike in Ireland, part-fiber providers can continue to call their services fiber in the UK.

Appendix

Further reading

Ireland (Country Regulation Overview), GLB005-000161 (July 2019)

"New charge controls and repair targets for Openreach should stimulate FTTH investment," TE0007-001143 (May 2017)

"The introduction of 'nutrition labels' could put an end to misleading broadband advertising," TE0007-001019 (April 2016)

Author

Sarah McBride, Analyst, Regulation

[email protected]