Broadband Contracts: the definitive guide
Check the small print: simple to say, much, much more difficult to do.
Broadband contracts are now near novella length, and the language they use is almost uniformly opaque in exactly the sections where you'd hope it'd be most clear.
That's why we've put together our take on broadband contracts:
What's in a contract?
A broadband contract's primary purpose is to establish the basic level of service the consumer should expect and what the provider should expect in return.
Generally the provider promises to:
- Exercise reasonable care and skill to provide the agreed service
- Pay any damages they're liable for if the service isn't provided (these are usually minimal).
While the consumer must promise to:
- Use the service for a minimum period
- Use the service legally (no hacking, for example)
- Use the service reasonably (for example, by staying within the download limit and according to the acceptable use policy)
- Maintain any equipment the provider has given them.
As you can see, contracts are heavily skewed: providers make it as difficult as possible for consumers to leave during the minimum contract period while taking little solid responsibility themselves for the level of service provided.
Tied up, tied down
The vast majority of broadband providers sign customers up to a minimum contract of 12 months.
Longer contracts, usually 18 months, are more common among packages with a higher monthly price, primarily those including digital TV and fibre broadband.
Changing package usually means being locked into a new mandatory contract, whether the change occurs before or after the minimum contract is up.
This is the case whether switching to a fibre deal from standard broadband (or a faster fibre deal than the one you already have), or if you take another service from the same provider - for example you're a BT broadband customer taking their TV service for the first time.
Check with your provider before confirming any changes to your service.
After the contract
Once the initial contract period is over, most broadband providers move their customers to a 30-day rolling contract. Most then request 30 days' notice, or that we begin an "approved switching process" if we want to cancel.
There's more on the two types of switching process they approve of in this guide.
Before Ofcom banned them towards the end of 2011, a very small proportion of providers used to keep customers tied to them with Automatically Renewable Contracts (ARCs).
With an ARC, once a customer came to the end of their lengthy contract, the provider would give 30 days' notice before having them choose to renew, or cancel and go elsewhere.
But as mentioned, Ofcom outlawed ARCs for broadband and phone services, saying they were harmful to both consumers and competition.
Distinct from an ARC is a practice known as slamming: simply, moving consumers to a new broadband service without their express consent.
In many cases, the first thing the customer knows about their new broadband provider is getting a bill from them in the post.
Never accept slamming.
Signing up for more information from a provider, or starting but not completing online registration, does not constitute permission to switch and you're entitled to be moved back to your original provider.
Make sure the company involved gets their just desserts by reporting them to Ofcom, too.
Getting out of a broadband contract
Broadband contracts are notoriously difficult to leave once signed.
If, as most of us will have done, you signed up to a broadband deal by phone, post or online, within a very recent period (the legal minimum is 14 days), you should have the right to cancel under the Consumer Contracts Regulations (see the full guide on this for more).
You also have rights if you're having serious problems with your connection or feel that you were mis-sold the broadband package.
At present anyone more than three months into a contract whose connection is slower than snail's pace is stuck.
But from October 2015, failure to meet the Minimum Guaranteed Access Line Speed (MGALS) will count as a "serious problem" no matter how far into the contract a customer is, giving users another way out.
See our guide to making a broadband complaint for more on this situation.
Those with contracts made after January 2014 also have the right to leave mid-term, without penalty, if their provider raises basic subscription prices or changes the agreement terms.
As we explained at the time, this isn't as a result of a rule change, but of the way Ofcom decided to interpret the existing regulations.
If none of these situations apply - you're dissatisfied but there's no serious failing on the part of the provider, you're moving and don't want to take the provider with you, or you've simply seen a better deal elsewhere - paying a cancellation or "early termination fee" is likely to be the only way out of a contract. Find more on those fees here.
Here are a few provisions put together by Ofcom regarding opting out of a contract and the charges that apply:
- Before you sign the contract, the minimum contract period must be clearly highlighted and easy to understand
- It must be absolutely clear that you risk paying a charge if you end the deal early, and you must also know how much that charge will be
- The charge should not be more than the amount you would have paid had you stayed in contract, and also
- The charge should reflect any savings a company might make when you cancel the deal, or anything that they can re-sell.
Under the Unfair Terms in Consumer Contract Regulations Act 1999 as interpreted by Ofcom termination fee should never be more than the total cost of supplying the service to the end of the contract.
Note also that they say the fee should really be less than that.
Some providers are somewhat cheeky and continue to charge as much as it would have cost to see out the whole contract. However, most - but not all - will multiply the number of months you have left in your contract by slightly less than your monthly bill.
Say there are six months left for a service that costs £10 a month. The ISP might ask for an early termination fee of £8 x six months, a total of £48.
Sidestepping a broadband contract
Charges like that make sidestepping a broadband contract altogether seem suddenly much more attractive.
They're not easy to come by - just a handful of UK broadband providers offer home contracts of 30 days or less - and they can be subject to fairly high set up costs.
But for those who can't afford to get tied into longer-term deals, or for whom quality of service is more important than a bargain price, they can be worth a look.
Find out more about them in this full guide.