Ofcom has encouraged internet service providers (ISPs) to market their broadband packages in a more transparent fashion.

Speaking to the Institution of Engineering and Technology, chief executive Ed Richards urged firms to help maintain consumer confidence in the industry by being more realistic when advertising speeds.

He said: "We would encourage the ISPs to provide more hard information up-front to consumers."

Consumer group Broadband Choices recently found that broadband users on the fastest package offered by providers frequently receive speeds that are up to 50 per cent slower than advertised.

Mr Richards also suggested that customers may eventually have to pay to use bandwidth intensive services such as online video websites.

He added: "In the longer term, it may be that some consumers will be willing to pay a premium for higher download limits and higher speeds."

Demand for video-on-demand websites such as BBC's iPlayer has rocketed by 178 per cent over the past year, according to online monitor[s?] Hitwise.