Broadband Advertising Claims Coming Under Fire

Communications Today, July 8, 2002

In recent days broadband providers at opposite ends of the world have gotten in trouble with their respective watchdog organizations for advertising claims. Claims that compare speeds and prices with competitors have drawn regulatory attention in both the UK and Australia.

The UK's Advertising Standards Authority found against BT [BTY] for an ad claiming that its broadband service was "up to 40 times faster than dial-up," based on 56 kbps dial-up and a 2 Mbps broadband connection. Competitor Telewest argued that domestic customers could get service only 10 times faster than dialup. ASA found that, while BT does offer a 2 Mbps service, and does make that service available to consumers, its primary target is business customers. The usual service available to residential customers is 500 kbps, or roughly ten times faster than dial-up. The body rejected two other complaints against BT, though, which argued that the company exaggerated its degree of DSL coverage.

Meanwhile in Australia, Telstra [TLS] has withdrawn ads after investigation by the Australian Competition and Consumer Commission -- although ACCC had not made an official finding that the ads were misleading, and now says a decision is unnecessary. The ads compared Telstra's $54.95 monthly price for DSL to a supposed $51.60 for dial-up. The ads confined installation charges to the fine print and failed to disclose that the dial-up pricing was based on a second, dedicated phone line for Internet use. While matching DSL's simultaneous voice and net capability would require a second line, some 80 percent of Australia's dial-up users make do with a single line.