Using the term "fibre broadband" in adverts for part-fibre services is not "materially misleading", the Advertising Standards Authority (ASA) has said.
The ASA has recently carried out a review into whether the term "fibre" should only be used to describe full-fibre broadband services, rather than part-fibre connections that still use copper cables.
However, the watchdog found that while consumers did notice fibre claims in ads, consumers regarded it as a "shorthand buzzword to describe modern, fast broadband".
Furthermore, the ASA said the word "fibre" is not a priority identified by consumers when choosing a broadband package.
The research also found that consumers did not believe they would change their previous decisions after the differences between full and part-fibre services were explained to them.
However, the ASA has sought to offer advice to broadband providers on how they should use the word "fibre" in their advertisements, to prevent possible confusion.
The watchdog said non-fibre services should not be described as "fibre", while ads should not state or imply that part-fibre services are the most technologically advanced on the market.
Performance claims for part and full-fibre services must also be appropriate for the type of technology delivering that service, and should hold evidence to substantiate the specific claims made.
Responding to the news, Digital Minister Matt Hancock said: "The clarification on the way fibre services should be advertised is a welcome step in the right direction, and I hope the ASA will keep the matter under review."
However, the ASA's conclusion that describing part-fibre services as "fibre broadband" is not misleading to customers has been criticised by Gigaclear, Hyperoptic and CityFibre.
In a joint statement, the companies said the watchdog has "failed in its duty to protect what is undeniably in consumers’ best interests - the transparency around the services they are being sold by technology providers".
The providers stated that by allowing copper-reliant products to "continue to masquerade as full-fibre, despite their clear and recognised inferiority in terms of speed and quality, consumers will continue to be ill-equipped to make an informed choice".
This, they warned, could help to fuel "mounting distrust" in the telecoms sector.