Ofcom bans rollover contracts for broadband

VoIP hardware users and others accessing the internet via a broadband connection are set to benefit from a new regulatory move from Ofcom.

The watchdog yesterday (13th September) confirmed that rollover contracts, in which broadband and landline customers are tied into repeated minimum contract periods, will be abolished from December.

Commenting on the move, Ofcom chief executive Ed Richards claimed that this method, which is also referred to as Automatically Renewable Contracts (ARCs), proved a barrier to competition.

"Our concern about the effect of ARCs and other 'lock in' mechanisms led to our decision to ban them in the communications sector," he said.

As of 31st December 2011, the ban will come into effect and Ofcom has also made it mandatory for communications providers to offer alternative deals to those currently affected by ARCs.

This comes after TalkTalk commercial director David Goldie told the Guardian that BT is attempting to build a monopoly around fibre-optic broadband.