ASA Adjudication on Tiscali UK Ltd

Ad

Two press ads and an Internet promotion for Tiscali broadband services.

a. One press ad stated "NEW! FREE Phone Line Rental. Unlimited UK Phone Calls. With up to 8 Mb Broadband Only £19.99 a month". Small print at the bottom of the ad stated "Offer available with Tiscali Max Extra at £19.99 a month. One off £30 set up fee applies. Free calls to UK numbers beginning with 01 and 02 only. Non cable phone line required. Subject to survey, local availability, compatibility and fair use policy. Minimum contract, conditions apply. Top speeds vary significantly (e.g. due to distance from local exchange)".

b. Another press ad stated "Tiscali Broadband. Now Includes: Phone Line Rental. UK Phone Calls. All for £14.99 a month. Save £126!" Small print at the bottom of the ad stated "… Subject to survey, local availability, compatibility and fair use policy...”

c. The Internet promotion stated "Unlimited Broadband from £7.99 a month". The next click showed text that stated "Broadband from £7.99 per month. More info". The next click showed text that stated "£7.99 a month for the first 3 months £12.99 thereafter ...".

Issue

TalkTalk Telecom Ltd (TalkTalk) complained that:

1. the claim "FREE Phone Line Rental" in ad (a) was misleading, because a one-off set-up fee of £30 was applied and because they believed Tiscali's base broadband package had not been available in the market for a reasonable period before the launch of the "free" offer;

2. the claim "Unlimited UK phone calls" in ad (a) was misleading, because they believed the cost of calls was inclusive for the first 60 minutes of each call but a charge applied thereafter; and

3. the claim "up to 8 Mb Broadband" in ad (a) was misleading, because most Tiscali customers could not achieve speeds of 8 Mb and the qualifying text "Top speeds vary significantly ..." was insufficiently prominent.

TalkTalk and a member of the public complained that:

4. ads (a) and (b) did not make sufficiently clear that the package was available to consumers who lived in certain areas of the UK only; and

5. the member of the public complained that the Internet promotion was misleading, because it did not make sufficiently clear that the headline price of £7.99 was available for a period of three months only, after which the service cost £12.99.

CAP Code

Response

1. Tiscali explained that the broadband package used to be £19.99 a month with a £30 set-up fee and optional line rental at £10.99 a month.  The package existed in that way for nine months prior to soft launch and 12 months prior to hard launch of the "free" line rental; they believed that was a reasonable period of time.

2. Tiscali said the phone calls were unlimited, with no charges after 60 minutes and no time restrictions.

3. Tiscali said the qualification "Top speeds vary significantly (e.g. due to distance from local exchange)" appeared in the small print in ad (a) but in all press ads since that one it had appeared in the body copy.  However, they said some of their competitors were not including that same text in their own ads for up to 8 Mb products.

Tiscali said most broadband providers advertised and provided speeds of up to 8 Mb, but none was able to monitor every individual customers speed performance.  They explained that, when customers selected the up to 8 Mb product on their online registration pages, they were asked to enter their telephone number, whereupon a message was displayed which advised customers of the maximum speed Tiscali estimated their line could support.  At the same time a link was provided to a clear explanation of other factors that could affect maximum broadband speed.  Customers could then decide whether or not to go ahead with their order.  Tiscali said all that information was provided to manage customers expectations of the broadband speed they could achieve.

Tiscali submitted independent test reports from August 2007 to February 2008 on their up to 8 Mb connection speed performance compared with six other up to 8 Mb providers.  The reports showed that, between August and November 2007, Tiscalis performance was second best with an average connection speed of 6.5 Mb.  Between November 2007 and February 2008 Tiscalis performance was fourth best with an average connection speed of 6.0 Mb.

Tiscali said some of their up to 8 Mb customers were on the BT Wholesale ADSL MAX product, which was available to all the major broadband providers.  They explained that Local Loop Unbundling (LLU) enabled operators to connect directly to the consumer, via BT's copper local loops, and then add their own equipment to offer broadband and other services.  Tiscali had unbundled some of the largest telephone exchanges in the UK and installed their own equipment, which meant a substantial proportion of their customers were not on the BT Wholesale ADSL MAX product but were instead on Tiscalis own LLU up to 8 Mb product.  

Tiscali submitted raw data from May and June 2008 on bulk speed testing of all their LLU customers on the up to 8 Mb product.  They also submitted information on the percentages of non LLU up to 8 Mb customers who achieved certain proportions of the headline 8 Mb speed.  The latter was generated by BT Wholesales systems over a period of three years.

Tiscali believed the question of whether the claim "up to 8 Mb" was misleading was an industry-wide issue and was not limited to ads for their own products.  They said they and the rest of the industry had, in the past, adapted and invested to meet their customers' changing requirements and intended to carry on doing so in the future.

4. Tiscali pointed out that the small print in both ads stated that the offer was subject to local availability and compatibility.  They said the product was available to 52% of all UK households spread across the UK.  They said customers who were outside the areas where the product was available were offered a 25% discount off their phone line rental.

5. Tiscali said the claim "Unlimited Broadband from £7.99 a month" was a promotional button on their website.  If consumers clicked on it, it took them to an initial landing page which gave them the option of selecting more information on "Broadband and Phone from £14.99 per month" or on "Broadband from £7.99 per month".  If they selected the latter, they were given a choice of three broadband packages; Tiscali said text under the £7.99" package clearly stated that the cost was £7.99 for the first three months and £12.99 thereafter.

Assessment

1. Not upheld

The ASA considered that the broadband package at £19.99 a month with a £30 set-up fee had been available in the market for a reasonable period of time before the launch of the "free" offer.  We noted the line rental was optional from Tiscali, not an integral part of the broadband package, before the "free" offer was introduced.  We therefore considered that the free line rental was additional to the established package and its addition had not increased the price of the package or reduced the quality or composition of the elements that were already included in the package.  We concluded that the claim "FREE Phone Line Rental" was unlikely to mislead at the time the ad appeared.

On this point, we investigated ad (a) under CAP Code clauses 7.1 (Truthfulness) and 32.3 (Free offers) but did not find it in breach.

2. Not upheld

We noted from Tiscali's call rate information that there was a 3p per minute charge for calls that were over 60 minutes long, but that applied to a different tariff from the one advertised.  We understood that the cost of all calls was included in the advertised package and a 60 minute maximum threshold did not apply.  We therefore concluded that the claim "Unlimited UK phone calls" was unlikely to mislead.

On this point, we investigated ad (a) under CAP Code clause 7.1 (Truthfulness) but did not find it in breach.

3. Upheld

We understood that, since ad (a) appeared, Ofcom had introduced a voluntary Code of Practice for Internet service providers and Tiscali had signed up to it.  Under that Code, Tiscali were required, amongst other things, to provide customers at the point of sale with an accurate estimate of the maximum speed their line could support and to resolve technical issues to improve speed.  They were also required to offer existing customers the choice to move onto a lower speed package if estimates given at the point of sale were inaccurate.

We understood that the test reports from August 2007 to February 2008, although independent, were carried out on only one line or on a proportionally small number of lines.  We therefore considered that the bulk speed testing data from May and June 2008 was more comprehensive and provided a better picture of the speeds Tiscali customers were obtaining.  We noted in this instance there was no significant difference between the LLU and non LLU speeds.

We understood that the speeds "up to 8 Mb" services generally could deliver were significantly affected by signal attenuation, which was caused by distance from the exchange, and that as a result a significant proportion of consumers could not achieve speeds close to the headline speed.

We understood that consumers who were using broadband for basic functions, such as web browsing, would be unlikely to notice a deterioration in service if their speeds fell to 2 Mb; we noted just over 90% of Tiscali's 'up to 8 Mb' customers achieved speeds of at least 2 Mb.  However, we considered consumers who were attracted to an 'up to 8 Mb' service were likely to want to carry out more sophisticated online activities than merely web browsing.  We understood that consumers using broadband for video streaming or online gaming would be unlikely to notice a significant deterioration in service if their speeds fell to 6 or even 4 Mb; we noted approximately 50% of Tiscali's 'up to 8 Mb' customers achieved speeds of at least 6 Mb and slightly over 70% achieved speeds of at least 4 Mb.  However, we understood that connection speeds were a significant factor when users were accessing files with large amounts of data, such as video or audio files, and those using broadband for downloading files such as music or video files were likely to notice a deterioration in service if their speeds fell to 6 Mb.

We considered that, on balance, a sufficiently reasonable proportion of Tiscali 'up to 8Mb' customers achieved the top speed, or close to the top speed, to have rendered the headline speed claim "up to 8 Mb Broadband" acceptable if the qualification "Top speeds vary significantly (e.g. due to distance from local exchange)" had appeared in the body copy instead of the small print.  However, because the qualification had not appeared in the body copy in ad (a), we considered it was insufficiently prominent and the claim "up to 8 Mb Broadband" in ad (a) was therefore misleading.  We were pleased to note Tiscali's assertion that the qualification was now appearing in the body copy.

In addition we considered that, as broadband penetration increased, consumers were likely to attach more importance to the ability to download large files quickly than they did two years ago.  We understood from Ofcom's 2006 Digital Progress Report on Broadband, published in April 2007, that 50% of adults with broadband at home downloaded music files, films or video clips.  We also considered that the demand for downloading large amounts of information quickly was likely to increase in future.  We considered that the speeds achieved by Tiscali 'up to 8 Mb' customers were very close to the line in supporting an 'up to 8 Mb' speed claim, even with a prominent qualification, and as broadband became even more popular and more sophisticated in future, the speeds Tiscali had shown us their customers were currently achieving might not be sufficient to support an 'up to 8 Mb' claim.  We were pleased to note, however, that Tiscali intended to adapt and invest to meet customers' requirements in the future, which might enable them to continue to make qualified 'up to 8 Mb' claims.

On this point, ad (a) breached CAP Code clause 7.1 (Truthfulness).

4. Upheld

We noted the package was available to only 52% of UK households.  We understood that availability was spread across the entire UK; it was not the case for example, that the package was available only to customers who lived in certain counties or cities.  Although we considered it would not be practical for the ads to list all the areas where the product was not available, we nevertheless considered that the non-availability of the package to 48% of UK households was a significant condition and therefore the disclaimer "Subject to local availability" ought to have been given more prominence.

On this point, ads (a) and (b) breached CAP Code clauses 7.1 (Truthfulness) and pre-September 2007 34.1 (Significant conditions for promotions).

5. Upheld

We noted consumers who were interested in the online "Unlimited Broadband from £7.99 a month" promotion needed to click through two pages before finding out that the cost was £7.99 per month for the first three months only.  We considered that consumers would infer from the claim that package prices started from £7.99 per month, not that the price would increase after some months had passed, and would be both surprised and disappointed to learn that the £7.99 price was for the first three months only.  We considered that was a significant condition which ought to have been made clear at an earlier stage and that consumers were likely to find the initial unqualified claim "from £7.99 a month" misleading.

On this point, ad (c) breached CAP Code clauses 7.1 (Truthfulness) and pre-September 2007 34.1 (Significant conditions for promotions).

Action

The ad must not appear again in its current form.  We told Tiscali to make clear in the body copy of future similar ads that the package was subject to local availability.  We told them to ensure that the qualification Top speeds vary significantly (e.g. due to distance from local exchange)" appeared in the body copy of non-broadcast ads that claimed "up to 8 Mb Broadband" in future.  We also told them to ensure that future similar Internet promotions made clear at the first mention of the £7.99 price that it was the cost per month for the first three months only.

Adjudication of the ASA Council (Non-broadcast)