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Telecoms giants BT, TalkTalk and Virgin Media are working on a new code for business broadband that will help to safeguard smaller firms by regulating speeds.

According to communications regulator Ofcom, the three organisations have all agreed to help solve the problem of poor business broadband speeds, which not only hamper some companies' ability to do business, but also has a knock-on effect on the economy.

Small and medium-sized enterprises of fewer than 250 employees constitute 99.9% of UK businesses, account for 60% of private sector employment, and generate 47% of business revenue, so access to high-quality communications services is essential.

In a new report entitled Broadband Services for SMEs, Ofcom found that 83% of small businesses consider communications services to be fundamental to their business, while 78% use a fixed broadband connection, yet 15% of firms feel that their needs are not well catered for by the communications market.

Their concerns revolve mainly around broadband speeds, availability, quality of service and choosing between providers, and as such the regulator has formed a new group comprising the country's three major business broadband providers.

One of the key issues set to be addressed is the fact that SMEs are less well served by superfast broadband than residential users; Ofcom figures published last year found that only 56% of SME premises had access to superfast broadband, compared to 75% of the UK as a whole.

The new Code of Practice drawn up by TalkTalk, BT and Virgin Media will be similar to the consumer code, which requires those selling an internet service to give the customer an accurate estimate of the actual speed they will receive and to resolve any technical problems that could reduce broadband speeds.

It also allows customers to leave their contract if speeds stay below a minimum level, and the new business code is expected to follow a similar line, but tailored to the particular needs of smaller firms.

This will include offering commitments relating to upload speeds, which are particularly important to many businesses, in addition to download speeds.

Ofcom Chief Executive Sharon White said small businesses are "essential" to the UK economy, yet some lack the resources or expertise to get the services they need.

"We’ve made clear we want to see better broadband coverage, quality of service, information and advice for all consumers, and that means business users too. So we are taking action alongside industry and the government to make that happen," she commented.

It comes a week after the regulator introduced new legislation to boost fair competition in the market, enabling businesses with fewer than ten employees, as well as consumers, to switch provider over BT’s network by only dealing with their new supplier.

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