Automatic Compensation For Broadband Problems Begins

Next week will see the introduction of automatic compensation, without having to ask, for customers of BT, Sky, TalkTalk, Virgin Media and Zen Internet who experience delayed repairs, installations or missed engineer appointments.

More To Follow

PlusNet has also committed to the scheme but hasn’t provided a timescale while Hyperopic and Vodafone will begin automatic compensation later this year, and EE is likely to start paying compensation automatically in 2020.

Finally Agreed Last December

Initially announced by Ofcom back in November 2017 following a review and intervention in the broadband market, the voluntary agreement, which will only apply if a fault takes longer than two days to fix, was reached between Openreach and the five UK service providers last December.

The Scale of Broadband Problems

Ofcom figures show that there are a staggering 7.2 million cases of broadband or landline customers suffering delayed repairs, installations or missed appointments per year and before this scheme only 1 in 7 customers received compensation. Those few who did receive the compensation had to ask for it rather than it being automatically paid, as is the big change with the new agreement.

How Much?

The new agreement (which was reached after more than 6 months of negotiations and which is subject to a 12-month review of Cancelled Provisions) should mean that £8 compensation per-day can be paid, with £25 compensation if an engineer does not arrive on schedule or cancels within 24 hours, and an offer of £5-per-day can be made for new services not starting on time.

Customers whose providers are not in the scheme can choose to switch to a new provider if they are unhappy with their current service.

Fastest Way?

Ofcom’s answer to the questions about why there are no formal regulations for automatic compensation and why this is still a voluntary agreement is that it has proved to be the quickest way to get a commitment from the largest companies and to get some kind of scheme up and running for 95% of households.

Openreach – Given Own Quality Standards

Openreach (who many blame for the origin of many broadband problems because of their responsibility for the physical infrastructure in the UK over many years) has been set its own set of tough Quality of Service (QoS) standards by Ofcom. However, Openreach’s position of not paying out for force-majeure events, and Ofcom expecting retail ISPs to cover those costs themselves has led to some ISPs perhaps feeling that they will still end up paying for Openreach’s failures.

What Does This Mean For Your Business?

For businesses, a fast and reliable broadband connection is vital to operate and compete effectively in today’s marketplace. Problems with broadband services can be very costly and frustrating for businesses, and many businesses feel that they shouldn’t have to fight for compensation on top of the problems caused by poor broadband services and that current levels of compensation are too low, and don’t come close to reflecting the harm caused. Automatic compensation at higher levels is, therefore, welcome news, but many businesses may still think that the amounts on offer are unlikely to cover the disruption and problems caused after several days of broadband problems.

The new automatic compensation scheme will still be good news for small businesses because one-third of small and medium-sized enterprises (SMEs) choose residential landline and broadband services, and around half (49%) of SMEs don’t know if they’re entitled to compensation when service falls short (Ofcom figures).

It is also reassuring to know that the main providers are on board with the scheme and that Ofcom plans to monitor its implementation, review it after one year, and step in if it's not working well enough for customers.

Posted by Andrew Sewell,

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