The Advertising Standards Authority has started an investigation into Virgin Media after claims that its advertising campaign “Truth, Lies and Broadband” is misleading consumers.

The advertisements, which have appeared in national newspapers, on radio and online, say that Virgin Media’s broadband is “delivered via a fibre optic cable – meaning that it is officially the fastest and the best-performing broadband available”. The company also claims that it “doesn’t use copper wire, like most providers”.

However, Virgin’s fibre optic network stops at street level and its broadband is delivered to individual homes via a standard coaxial copper cable. It is also possible for computer owners to get faster broadband through BT’s ADSL network – if they are lucky enough to live near to an exchange.

Sebastien Lahtinen, of thinkbroadband.com, an independent broadband comparison service, said: “Some listeners to the advert assumed Virgin would be delivering fibre to their home, which is not the case with this service. Also, the claim to provide ‘unlimited super-duper fast fibre optic cable broadband’ is strongly conveying the idea of fast speeds, when users might question the potential slow-downs during peak periods due to traffic shaping and whether 2mbps [megabits per second] itself is ‘super-duper fast’ these days.”

Matt Wilson, a spokesman for the Advertising Standards Authority, said that the watchdog had received 12 complaints from the public. “We have assessed the complaints and we believe that they are of sufficient merit to launch an investigation,” he said. “We have written to Virgin Media asking it to provide evidence to substantiate its claims.”

The investigation comes at a time of flux for Virgin Media. The company is being stalked by private equity firms. Also, Virgin Media’s rival, BSkyB, the satellite broadcaster that is 39.1 per cent owned by News Corporation, parent company of The Times, has revealed that it added 90,000 customers in the second quarter of 2007. Almost 40,000 of Sky’s new subscribers are believed to have defected from Virgin after a dispute between the two companies that led to the satellite operator withdrawing its Sky One and Sky News channels from the cable television network.

Alexandra Legg, a spokeswoman for Virgin Media, defended its adverts. She said: “We don’t offer fibre optic cable to the home, but we’re trying to make it clear to the consumer that our fibre goes right down to the street level, whereas with ADSL it only goes as far as the exchange.

“Hence our ability to offer bandwidth doesn’t vary with the distance from our headends [the electronic devices that handle signals]. Regardless of where you live, if you’re in a cabled area we can offer 20mb to any home.”

The ASA said that its council would adjudicate on the case when it had received representations from Virgin Media.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive