Ofcom Bans Rollover Contracts From December

The U.K. Office of Communications, or Ofcom, said Tuesday that rollover contracts, which tie landline and broadband customers into repeated minimum contract periods unless they opt out, will be banned from December this year.

MAIN FACTS:

-Contracts, also known as Automatically Renewable Contracts, or ARCs, roll forward to a new minimum contract period - with penalties for leaving - unless the customer actively opts out of the renewal.

-Ban will apply to ARCs for landline and broadband services sold to residential and small business customers.

-BT Group PLC (BT) is the largest communications provider currently offering these contracts and Ofcom estimates that 15% of U.K. residential consumers are on rollover contracts.

-Other residential providers include Adept Telecom PLC (ADT.LN), Axis Telecom, Eze Talk and iTalk, while TalkTalk Business, Titan Telecoms, and Optimum Calls offer ARCs to business users.

-Ofcom will also require communications providers to move all residential and small business customers currently on rollover contracts to alternative deals, and to completely remove rollover contracts from the market by Dec. 31, 2012.

-By Ian Walker, Dow Jones Newswires; 44-20-7842-9296; ian.walker@dowjones.com

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