Regulations set to rope-in rogue ISPs

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When dissatisfaction with your Internet Service Provider leads you to switch supplier, you may expect an apology or at least a hint of regret. Not so in the case of the UK's PlusNet, which I discovered has a more brute force approach to losing customers: They don't allow you to leave.

But from 14 February, new rules laid down by industry watchdog Ofcom will force ISPs to honour cancel requests. Rogue service providers will face heavy fines.

At the centre of the issue is the Migration Authorisation Code (Mac) which a customer's new ISP requires in order to complete the transfer process. The customer can only obtain the Mac from their current ISP and, until now, there was little that could be done if the service provider refused to supply it.

Most major ISPs committed in 2004 to a voluntary code of practice which states:

"The existing service provider cannot withhold an authorisation code to enforce debt collection or contractual rights."

However, a significant minority of service providers rejected this code of practice and continued to withhold Macs as a way of strong-arming customers.

The new Ofcom regulations formally forbid them from doing so:

"Broadband service providers who are losing a customer will be required to provide Macs on request in most cases. They will not be able to withhold Macs where the customer owes them money ('debt blocking') or charge for Macs."

The regulations have received a cautious welcome.

"The 234,000 consumers switching broadband every month have a right to do so simply and free of charge," said Steve Weller of independent comparison and switching service uSwitch.com.

"With this in mind we are pleased that Ofcom has taken a step forward towards resolving the Mac code issues."

Research by Ofcom has shown that 83% of UK broadband customers who had switched provider had found it easy to do so.

The other side of that statistic is that nearly 40,000 people every month are having difficulties making the switch.

So what might be a typical experience?

I suspect I was in the majority of UK broadband users in naively assuming that switching provider would be my choice, not the choice of my ISP. But the reality became all-too apparent this week when, after several years as a fully paid-up premium customer, I asked to terminate my PlusNet account.

Having endured many months of slow connection speeds and other service problems, I had confronted PlusNet with third-party evidence that the problems were being caused in part by so-called "traffic shaping" -- the company's deliberate blocking of some Internet traffic to theoretically improve the quality of other services.

When PlusNet admitted that this was the cause of my service problems, which I felt they should have told me at some point during all those months of complaints, line checks and diagnostic tests, I decided to switch ISP in protest.

The defiant response from PlusNet read:

"[There is a] 30 day notice period to pay for, the cost of this is detailed below. We are not in breach of contact (sic) with regards to traffic prioritisation. If you do not authorise the payment the Mac key will not be generated."

When I began researching my options, I soon discovered Ofcom's voluntary code of practice which forbids the withholding of Macs. Although PlusNet's parent company British Telecom is on the list of companies that agreed to follow the guidelines, PlusNet itself is absent.

I approached PlusNet again with a copy of the industry's code of practice, along with the regulations which will come into force on 14 February.

PlusNet's view remained steadfast: I must pay a cancellation fee or the Mac for my account will be withheld.

Setting aside the issue of how one ISP has treated one customer, the greater concern must be: How effectively will Ofcom enforce the new regulations?

The broadband complaints section of the Ofcom web site is a labyrinth of dead ends, most directing you back to the ISP you're complaining about. Both the advice and complaints phone lines are constant queues. And a recorded message informs you that even if you do get through to a human, Ofcom will not investigate individual complaints.

Ofcom does at least recognise the importance of allowing consumers to easily switch between broadband providers. The regulator explains the issue:

"Where consumers don’t have access to processes that let them switch easily, they may suffer inconvenience and distress. If consumers start to think that switching providers carries this kind of risk, the competitive process can be dampened in a way that means all consumers will suffer. Competition is only effective where customers can punish 'bad' providers by taking their custom elsewhere, and reward 'good' providers by staying where they are. If switching is difficult, competition may, over time, fail to ensure that consumers receive the benefits they should be able to expect."

So can broadband consumers relax in the knowledge that we finally have a regulator with teeth to keep rogue service providers in line? Time will tell. As of tomorrow the rules are in place, it just remains to be seen how effectively they will be enforced.