Business Broadband Contracts: What Should You Check Before Signing a 3-Year Deal?

This question has been published anonymously. Details that could identify the business or connectivity provider have been removed.

A business asked IT Club to review a proposed multi-site connectivity agreement before signing. The contract covered several UK offices and included a mix of FTTP and SoGEA broadband connections alongside a dedicated 1 Gbps leased line — approximately eight connections in total.

The total commitment was approximately £23,500 + VAT over a 36-month minimum term. The headline monthly pricing was competitive. But the business had heard about long telecoms tie-ins, escalating cancellation charges and unexpected costs, and wanted an independent view before committing.

IT Club reviewed the contract from a commercial and IT perspective. This article shares the general lessons. It does not constitute legal advice — a solicitor should review any contract with significant financial implications before signing.

Is a 36-month contract normal?

It depends on the type of connection.

For dedicated leased lines — where a provider installs a private, uncontended connection with guaranteed bandwidth — 36 months (or longer) is standard. A leased line involves significant installation cost and infrastructure commitment from the provider. Longer minimum terms reflect that investment.

For ordinary business broadband — SoGEA, FTTP and similar shared services — shorter terms are often available. Twelve or 24-month agreements are not uncommon. The 36-month term on ordinary broadband circuits is worth questioning.

Larger businesses are not subject to the same limit and can legitimately enter 36-month or longer agreements. But this does not mean 36 months is the only option. Businesses may be able to negotiate a shorter minimum term on the ordinary broadband circuits while retaining a 36-month commitment for the leased line where that is genuinely required.

Ofcom publishes guidance for businesses on contracts and commitments at ofcom.org.uk/phones-and-broadband/advice-for-businesses/contracts

What happens after 36 months?

Many contracts roll over automatically at the end of the minimum term if notice is not given in time. The contract reviewed required a notice period of three months — meaning the business needed to give notice three months before the end of the term to avoid rolling into a new period.

Thirty days' notice would be preferable. Three months is not unheard of in UK telecoms, particularly for leased lines, but it means a business can be locked into continued service for longer than expected if the date is missed.

Is the price actually fixed?

This is where many businesses make an incorrect assumption.

The contract reviewed contained provisions that could allow prices to change during the minimum term as a result of:

• Market conditions
• Regulatory changes
• Increases from the supplier's underlying network provider
• Changes to the service specification

These clauses are common in UK business telecoms contracts. They do not automatically mean the price will change — but they do mean a 'fixed' monthly price may not be as fixed as it looks.

The specific question to ask before signing:

Ofcom expects pricing and any agreed price-increase mechanisms to be made clear before a business enters a contract. If pricing terms are vague, ask for clarification before signing rather than after.

Early termination — probably the biggest financial risk

Early termination clauses in business connectivity contracts can represent significant financial exposure, particularly for multi-site organisations.

The agreement reviewed effectively allowed all remaining minimum-term charges to become payable on early cancellation of a circuit.

To illustrate the scale with a simple example:

This is not unusual in the industry. But it becomes particularly important for businesses with multiple locations, because offices can close, relocate or consolidate. An office move does not automatically release the business from the connectivity contract at that address.

Before signing, confirm whether the contract allows for:

• Transferring a circuit to a new address if the business moves
• Novating (assigning) the contract to a new occupier of the premises
• Any circumstances where early termination charges are waived
• A reduced early-termination charge that decreases over the minimum term

Make sure every circuit has its own contract anniversary

Multi-site connectivity agreements often cover services installed at different times. A new office might be added to the agreement six months after the initial order. A replacement circuit might be installed following a fault.

The critical commercial question is whether each circuit has its own service commencement date and its own minimum-term expiry date, or whether the agreement applies a single renewal date across all circuits.

Businesses should confirm:

• Each connection has its own recorded service commencement date
• Each connection has its own minimum-term expiry date
• Adding a new circuit to the agreement does not restart the clock on existing circuits
• The notice period applies per circuit rather than to the whole agreement at once

Record all commencement and expiry dates in the company's IT service register. Do not rely on the provider to remind you.

Watch the cancellation procedure

Speaking to an account manager is not the same as giving contractual cancellation notice.

Many connectivity contracts specify a precise cancellation procedure that must be followed for notice to be valid. This typically includes:

• Notice given through a specific channel — for example a particular email address or formal written notice
• Specific account or circuit reference numbers included in the notice
• Specific customer account information
• Notice given by an authorised person
• A minimum notice period counted from receipt, not from the date of sending

If the cancellation procedure is not followed precisely, the provider may argue that valid contractual notice has not been given — even if a conversation took place with the account manager.

Read the cancellation procedure in full before the end of the minimum term. File it alongside the contract commencement dates.

Who owns the router and supplied equipment?

Provider-supplied routers and customer-premises equipment often remain the property of the provider throughout the contract. This is standard practice.

But understanding the obligations matters, particularly at end-of-contract or on early termination. The contract reviewed specified:

• Equipment had to be returned within a short period after service termination
• Failure to return equipment could result in replacement charges based on new-equipment pricing
• Equipment removal from site could potentially be chargeable

Before signing, confirm:

• Who is responsible for return shipping costs?
• Will the provider collect the equipment, or must the customer arrange return?
• What are the charges if equipment is not returned by the required date?
• Who holds administrator credentials for any supplied router or firewall?
• Can the customer's IT support provider administer the router?
• Can the business use its own router or firewall instead?

If the business uses its own firewall for security monitoring, ask whether a provider-supplied router can be placed in a bridged or modem-only mode to allow the customer's device to sit in front of the internet connection.

Who actually provides the circuit?

The company that signs the contract with you is not always the company that physically provides the connection. The UK telecoms market includes many resellers who contract directly with business customers while using wholesale capacity from an underlying network provider.

This is entirely normal and does not mean the service will be inferior. But businesses should be clear about:

• Who to call when there is a fault — the reseller or the underlying carrier?
• Who manages the fault-resolution process?
• What happens to the SLA if the underlying carrier changes?
• Whether the reseller has the right to change the underlying network provider during the term
• Whether a carrier change would affect any agreed service levels

Ask the provider directly: if the network behind this service changes, does the SLA we have agreed remain unchanged?

The leased-line SLA matters

For a standard broadband circuit, the absence of a detailed Service Level Agreement is a commercial inconvenience. For a business-critical dedicated leased line, it is a significant omission.

The General Terms reviewed referred repeatedly to separate SLAs applicable to different service types — but the actual SLA document was not included in the pack supplied for review.

A leased line SLA should specify at minimum:

• Uptime or availability commitment — typically expressed as a percentage, such as 99.9%
• Fault response time — how quickly the fault will be acknowledged
• Target repair time — how quickly the service will be restored
• Support hours — when the SLA applies and when out-of-hours support is available
• Escalation process — what happens if the fault is not resolved within the target time
• Service Level Guarantees (SLGs) — the compensation or service credits payable if the SLA is missed

Request the applicable SLA document before signing, not after. Confirm it is the document that will actually apply to the leased line at your sites, not a generic company policy.

Ofcom provides information on SLAs and SLGs for business customers, and offers additional transparency and information protections for SME customers. Business customers can find relevant guidance at ofcom.org.uk/phones-and-broadband/advice-for-businesses/contracts

So was this a bad contract?

No.

Nothing in the reviewed agreement looked like an obviously predatory or unusual telecoms contract. It looked broadly like a conventional UK business-to-business connectivity agreement. The terms reviewed were recognisable, the pricing appeared competitive for what was included, and the structure was consistent with industry norms.

The point of the review was not to find problems — it was to make sure the business understood what it was signing.

Before signing, we recommended the customer obtain clear written answers on the following six points:

1. 1Price increases — are the stated prices fixed for the minimum term, and if not, exactly what can trigger a change?
2. 2Early termination charges — what is the exact calculation for each circuit if terminated early?
3. 3Cancellation procedure — what is the precise method, timing and information required to give valid notice?
4. 4Circuit-specific dates — does each connection have its own commencement and expiry date?
5. 5Equipment ownership and return — what are the obligations, costs and timescales?
6. 6Leased-line SLA — what is the actual applicable SLA document, and what compensation applies if it is missed?

5 questions to ask before signing a business connectivity contract

1. 1Is the monthly price fixed for the whole contract? If not, exactly what can cause it to change — and does a price increase give me the right to exit without penalty?
2. 2What will I owe if I cancel one connection early? Ask for the exact calculation, not a general description. For a £X/month circuit with Y months remaining, what is the specific figure?
3. 3Exactly when and how must cancellation notice be given? What channel, what information, what notice period — and who in our business is authorised to give it?
4. 4What happens to the router and other supplied equipment at the end of the contract? Who pays for collection or return, and what are the charges if equipment is not returned in time?
5. 5What SLA applies to the business-critical connection? Request the actual SLA document, confirm the uptime commitment, fault response and target repair times, support hours, escalation route and SLG (service credit) values.

Thinking about business broadband or a leased line?

Don't just compare the monthly price. Check the contract term, early-exit costs and SLA as well — and make sure you understand the cancellation procedure before the minimum term ends.

If you have a broadband or connectivity contract you would like reviewed, or a proposal you are not sure about, ask the IT Club Advisor.

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Further reading

Ofcom — Contracts: Advice for businesses: ofcom.org.uk/phones-and-broadband/advice-for-businesses/contracts

If you are also reviewing your office network, wireless infrastructure or switching alongside a connectivity upgrade, these IT Club Technology Intelligence articles may help:

Wi-Fi 7 for Business: Should You Upgrade Yet? →

Business Wi-Fi Upgrade Checklist — Knowledge Centre →

Is Your Business VPN Fit for Purpose? →

What Should Your IT Provider Be Monitoring? →

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