There has long been concern over optimistic broadband speed claims in ads. Now the writers of the broadcast and non broadcast CAP Codes are consulting on new proposed “Guidance” which will if adopted tighten the regime for these claims considerably. Anna Williams reports the key proposed changes.
Topic: Telecoms
Who: CAP and BCAP
When: 26 January 2011
Where: United Kingdom
Law stated as at: 28 February 2011
What happened:
The Committee of Advertising Practice (CAP) and the Broadcast Committee of Advertising Practice (BCAP) published two consultations at the end of January 2011. Both consultations focus on the advertising of broadband services: one focuses on the use of "up to" claims where broadband speed is concerned, and the other focuses on the use of claims that telecommunication services are "unlimited" despite a Fair Use Policy being applicable. The objective shared by CAP and BCAP is to produce new guidance for the industry which shall aid their interpretation of the Misleading Advertising sections of the CAP and BCAP Codes.
So why look at these types of claims now? CAP and BCAP consider that the complexities of the evolving communications market now necessitate a broader consideration of these issues than would be possible through an ASA investigation into an advertisement for a particular telecommunications or broadband service. It appears Ofcom, BIS and consumers have also expressed concern at the potentially misleading advertising of broadband services and communications services generally, hence CAP and BCAP have taken up the challenge. The consultation exercises came to a close on 25th February 2011. While CAP and BCAP are evaluating the responses they would have received, we take a look at the options CAP and BCAP presented to the industry as part of the consultation exercise.
Consultation regarding "up to" broadband speed claims
What is the present approach to such claims?
The current policy adopted by the Advertising Standards Authority (ASA) when assessing complaints relating to broadband speeds is that marketers can quote theoretical maximum speeds in their advertising, provided that they are qualified appropriately. Advertised speed claims must be qualified with the term "up to" to ensure consumers understand that the top speed referred to is not guaranteed and the speed received can be subject to variation. As speed is affected by signal attenuation, ADSL services with a headline speed of over 2Mbit/s must make clear in the body copy or equivalent that actual speeds depend on a consumer's distance from their local exchange. Finally, ads for broadband services must state in the footnote text any other limitations that have a meaningful effect on the top speed (eg traffic management policies which restrict top speeds at certain times).
This policy was developed in a time when 'superfast' services were not as common or widely available as they are now. The policy also attempted to be pragmatic in addressing consumer concerns as both technology and advertising developed. CAP and BCAP now feel that they need to have a consistent and proportionate policy regardless of platform associated with the services to be delivered.
What is driving the need for change?
CAP and BCAP feel the broadband market has changed significantly in recent years with residential broadband being used in over 70% of households today. Broadband speeds have increased and as faster services are coming onto the market, consumers are commonly using the internet for streaming and downloading large audio-visual files and so speed is now an important factor in a consumer's decision as to which broadband service to sign up to.
Many broadband services are marketed on the basis of a theoretical maximum speed (the speed at which the service is provided at the network end of the equation). The actual speed of the broadband service a consumer receives depends on a number of factors such as platform type and service provider and so no single figure can be used to accurately describe the actual speeds that will be received by all service users. CAP and BCAP have explained that they are looking into such claims now as both consumers and stakeholders are apparently increasingly concerned that the present ASA approach to these claims means that consumers are receiving advertising messages promises broadband speeds that are considerably slower than those they shall experience in practice.
What changes are being proposed?
The proposed guidance to be created by CAP and BCAP shall cover the following three main topics:
1. Speed claims that are likely to be acceptable in advertising
CAP and BCAP have proposed a number of alternative options, including having advertised speeds available to a certain percentage of users or to be associated with typical performance figures. The range of options discussed in the consultation paper can be reviewed here.
2. Additional information about performance that should be included in advertisements regardless of the approach taken to presenting speed claims
As well as requiring speed claims to be qualified with the phrase "up to" where maximum speeds are presented, CAP and BCAP would also like marketers to include prominent qualification for the effects of significant performance limitations and for there to be a requirements for an indication that actual speeds should be confirmed at the point of sale.
3. The substantiation likely to be required in support of speed claims
CAP and BCAP are proposing guidance on substantiation of speed claims that will not result in a significant change in advertising practice except that it will involve a consideration of protocol overheads such as IP headers which CAP and BCAP consider to be a material factor that contributes to the disparity between advertised and actual speed performance across all platforms.
Consultation regarding the use of "unlimited" claims in telecommunications advertising
What is the present approach to such claims?
The Advertising Standards Authority (ASA) will accept telecom providers claiming a service is "unlimited", even when it is subject to some form of a Fair Use Policy (FUP), if the existence of the FUP is stated in the advertisement concerned and the policy itself is both fair and reasonable. The ASA considers a FUP to be fair and reasonable if it only affects atypical users.
The ASA sees atypical users as being excessively heavy users of the service that form a small minority of the customer base of the service in question. This approach originated from the ASA's approach to advertisements for fixed line services and it has since been applied to ad campaigns for mobile telephony and data services also.
While assessing complaints on a case-by-case basis, the ASA has generally found it acceptable for a telecommunications service to be described as "unlimited" if up to 2% of users transgress the limits set by the applicable FUP (if any). This approach acknowledges the need for service providers to be able to protect their networks while recognising the overwhelming majority of service users will be unaffected by the FUP that is applicable.
What is driving the need for change?
CAP and BCAP have noted that no telecommunications service, texts, calls, broadband or data is truly 'unlimited' in an absolute sense especially when a FUP applies. Service providers impose FUPs upon users of their services to manage their network resources at certain times, to monitor accounts for illegitimate usage and to ensure that excessive users do not affect the integrity of the overall network to the detriment of other users. FUPs tend to involve a limit above which usage is considered to be unreasonable and the sanctions imposed will vary from provider to provider. Some merely monitor breaches of their FUPs and reserve their rights to take action, whereas others charge for excessive usage of the service in question.
A year or so ago, the ASA's position on the use of "unlimited" claims in this sector was called into question due to a persistent and level of complaints from consumers regarding mobile services and FUP restrictions. However, that consumer concern seems to be in decline as the number of complaints regarding telephony services has been decreasing since 2008 but CAP and BCAP has still chosen to look into this area.
What changes are being proposed?
The four options that were presented for comment as part of the consultation exercise were as follows:
1. Maintaining the ASA's present policy
This option maintains the ASA's present policy which states that "unlimited" usage claims where a service is subject to an FUP are likely to mislead unless the existence of the FUP is stated in the ad and the FUP in question is fair and reasonable and only affects atypical users.
2. Developing the present policy to exclude FUPs that involve additional charges or suspension of services
The present policy would continue to apply but providing that "legitimate users incur no additional charge or suspension of service (or similar) as a consequence of exceeding any usage threshold associated with the FUP". This would mean a service could not be advertised as being "unlimited" if the service provider: (a) charges for usage in excess of a particular limit (either automatically or by reserving the right to do so); (b) caps usage through any means; (c) terminates or suspends the service linked to usage; or (d) forces a user to change packages to one with a higher cost or stated limitation based on usage.
3. As with option 2 but also excluding customer specific severe traffic management
This option proposes a further requirement on service providers to ensure that FUPs do not unreasonably impact on legitimate users. The wording proposed is "FUPs may employ traffic management (or similar) as a consequence of exceeding a usage threshold. However, any such policies must not severely restrict the speed of access of the users who exceed the threshold".
4. The exclusion of services that include an FUP that restricts usage in any way
This option would discourage advertisers from describing services that include an FUP that restricts usage in any way as "unlimited". CAP and BCAP have proposed using the wording ""unlimited" usage claims are likely to mislead in advertisements for a service that is subject to a fair usage policy that limits, the legitimate user's usage of the service, whether by imposing a limit on the level of usage or the speed at which the service can be used". In this case, the ASA would therefore assess use of the word "unlimited" in a very literal sense and override its present approach to such claims.
For the full details of the options being contemplated click here.
Why this matters:
It is interesting that CAP and BCAP have chosen to look into these subject matters now, particularly the area of the use of "unlimited" claims in telecoms advertising seeing as the total number of complaints about advertising in the telecommunications sector has fallen significantly in recent years. CAP and BCAP have even acknowledged within the consultation papers that in the last 12 months mobile providers have moved away from using the term "unlimited". Whatever the reason, we shall soon have new guidance to follow where such "unlimited" and "up to" claims in the telecoms sector are concerned.
The new guidance being created will recommend an approach CAP and BCAP consider to be acceptable within the legal framework of the Consumer Protection from Unfair Trading Regulations 2008 and the Business Protection from Misleading Marketing Regulations 2008 (the "Regulations"). CAP and BCAP have indicated that they do not want to "stifle innovation" in telecommunications advertising and that because the Regulations derive from an EU Directive aiming for maximum harmonisation, they cannot apply a greater or a lesser restriction on advertising than is provided for within the Regulations.
The guidance to be formulated by CAP and BCAP shall take the form of a Joint Help Note for broadcast and non-broadcast advertising. Once this guidance has been published, if complaints are received about advertisements that have departed from the new approach in the Joint Help Note, the ASA will expect the marketer in question to be able to justify why their advertising does not adhere to the guidance and to prove why their advertisements do not mislead consumers.
CAP and BCAP are not strictly required to consult on the guidance they create but they have decided to do so on this occasion in the interests of transparency and to take into account a range of industry and consumer perspectives on the issues in question. They will then evaluate all the "significant responses" they receive to the consultation exercise before finalising their proposal for new guidance. Hopefully, given the industry research conducted to date and the responses they have invited to this consultation exercise, what is proposed in the new Joint Help Note shall be a sensible position that takes both consumer interests and technology developments into account. We shall have to watch this space…
No date has been given for when we can expect the Joint Help Note. Once CAP and BCAP have evaluated the responses to their consultation exercise, they shall publish their evaluation on the CAP website together with the reasoning behind the decisions they will reach. The approved guidance will then be presented to the ASA Council and also published on the CAP website. Once published, the Joint Help Note will apply immediately to all new campaigns developed and a grace period of six months shall apply to existing campaigns before they shall then have to be amended to adhere to the new approach adopted.
