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Win! Ofcom proposes auto-compensation for broadband woes

broadband-outage

Ofcom has today proposed that landline and broadband providers pay automatic compensation to customers for broadband and phone outages, something we’ve been calling for for several years.

Customers would be entitled to automatic compensation – either a cash payment, or a credit on a bill – without having to go through a potentially lengthy and difficult claims process, whenever:

  • their landline or broadband is not fixed quickly enough after it has stopped working; or
  • their new landline or broadband service is not up and running on the day promised; or
  • an engineer doesn’t arrive for an appointment as scheduled.

Compensation payments would be set by Ofcom and would apply to fixed broadband and landline telephone services only.

Ofcom estimates that the plans would mean up to 2.6 million additional landline and broadband customers could receive up to £185m in new compensation payments each year.

Essential service

Broadband has become a modern-day essential, like gas, electricity and water, so it is only right that consumers should get compensation when their provider fails to deliver.

Arlene’s experience is a case in point:

‘I was with one provider for nearly three years and had an average of nine months of broadband. They had three different engineers out to try and fix the problem, which they still couldn’t fix. I called them endless times and they always said the fault was my internal wiring.

‘I had an engineer out at my own expense and my internal wiring was fine – the fault was outside. I called my provider again and explained that I had an engineer out to test the internal and external wiring, and told them the fault was outside not inside… but never heard another word. So I called them to tell them I was reporting them to Ofcom and cancelled the contract and signed up with another provider.

‘The new provider sent out an engineer a week later and I explained the problems I had had for nearly three years. He went outside and came back in five minutes later and said that’s it fixed! I got a bill in from my old provider for ending the contract and for the final two months of contract… I should be getting PAID compensation for the 25 months of no service not BILLED…’

We’re pleased that Ofcom has answered our calls (and those of our supporters) for a statutory scheme for automatic compensation for when things go wrong with your broadband, and that it’s looking to bring the sector more in line with the other essential household services.

However, we think that it now needs to swiftly push ahead with these proposals and ensure that this and other measures help to significantly improve the service that broadband customers receive.

A consultation on today’s proposals is open until 5 June and a decision will be made around the end of the year.

Are you happy with Ofcom’s proposals for an automatic compensation scheme? Do you think they go far enough?

Comments
Profile photo of duncan lucas
Member

After 3 days out of service for each additional day BT already credits your bill and you can claim compensation , I would like to see more detail on the new proposals . I would also ike to be told what happens when a storm hits the UK and brings down large amounts of customers as has happened in the past ,especially the London area when I worked for BT they had to send engineers from all over Britain to repair it , is THAT BT,s fault ? or an act of God .Also what happens when a council workman operating a digger cuts through a main cable ? If BT are hit with that and its not a “5 minute job ” just think of the compensation they will claim from council tax payers via suing the regional council so a fund would need to be kept involving £10,000,s of £££ as I dont think anybody has calculated the actual costs of repairing the said cable could run into £100,000 or more . What if a telephone exchange is set on fire ? or criminals cut cables to break into banks etc there is a vast amount of issues to take into consideration here and I have only skimmed the surface .For those jumping with joy about this -look out for an increase in your rental charges and what about the convo,s on– why should BT charge line rental ? a big subject with many, that would completely destroy that argument. Also a car plows into a telephone pole 1000 subscribers sue BT what do you think BT are going to do to the car owners insurance company –claim for £10,000,s and what does that do to your car insurance premium?

Profile photo of alfa
Member

I agree with you Duncan. I hate this compensation culture as the rest of us pay for it one way or another and when compensation is easy, there are always those who will exploit it for their own gain.

I don’t think Ofcom have thought this through properly and should Which? be behind something that could push prices up with a knock-on effect?

Profile photo of duncan lucas
Member

I left something out Alfa , what if you are shouting for compensation now and you call out the engineer and the fault is in your house and its your fault – slow computer /faulty wiring RF interference from dect/ cell-net phone / baby watcher / internal renovations and so on ? You think £140 call-out charge is bad ?, just wait till BT charge you the full price and on a time spent basis or your adding an extension to your house , the builders cut the cable , BT hit you with £100,s and you try to get it back from the builders . it doesnt bare thinking about.

Profile photo of malcolm r
Member

Compensation when we suffer an identifiable loss through someone else’s negligence or deliberate act is one thing, but “automatic compensation”, as has been said above, simply loads all our bills and needs to be priced very sensibly, and the conditions under which it could be paid clearly set out.

I dislike the creeping compensation, blame, parasitic lawyer culture that seems to be entering our lives.

Profile photo of John Ward
Member

The first red link in the Introduction is Which?’s statement that sets out the compensation rates proposed by Ofcom, as follows –

Delayed repair following loss of service: £10 for each calendar day, after two working days, that the relevant service is not repaired.
Delayed provisions: £6 for each calendar day beyond the promised start date.
Missed appointments: £30 per appointment missed or cancelled with less than 24 hours’ notice.

The second red link takes you to Ofcom’s announcement which has a number of attachments that explain the detail. I have not opened those attachments so I do not know whether they answer Duncan’s points.

It is obvious that if the network or its installations suffers a serious outage for whatever reason there will be a significant automatic compensation payout that in the first instance will be a charge against the telecom service provider [mainly BT].

If we are away from home for a week or two and there is a system failure, I cannot see why we should get an automatic payment when we have suffered no loss of service [well we might have missed a few cold calls I suppose] so this proposal is just going to load unnecessary expense onto the operator’s costs which – unless they charge it against profits [ha! ha!] – will force up line rentals and call charges.

Recovering losses due to non-accidental damage as illustrated by Duncan does already occur but the magnitude of it will be much increased in the future and have a ripple effect throughout the economy; it already takes months and years to recover the amounts due under the existing process so it will be even more difficult to gather in the higher amounts and there is an increased risk of default or challenge through the courts. For accidental or non-attributable damage there will be no recovery and the automatic compensation will ratchet up the costs to the service provider. Alternatively the service providers will either take out insurance [at subscribers ultimate expense] or make contingency provisions or they will employ a lot more contractors on standby [again at network expense].

The notion that this overbearing compensation plan will have a corrective effect on system performance is not sustainable.

As Alfa says, this has not been thought through, except from one angle only. The penalties will slow down investment in new infrastructure, the renewal of existing assets, and the enhancement of network resilience since you cannot spend the same money twice.

I think Which? should now be asking Ofcom to reveal the financial data that will underlie this scheme:
a. how many network outages, connexion delays or missed appointments currently occur each year and what is the current compensation bill?
b. what would the automatic compensation scheme cost in the future based on the current default pattern?
c. what measures will Ofcom introduce [1] to ensure that (b) does not exceed (a) and indeed will progressively decline at no additional cost to subscribers, and [2] to ensure that compensation losses are a charge against profits.

The financial markets seem to have taken this in their stride suggesting they believe there will be no impact on profits, which is worrying for consumers.

Profile photo of duncan lucas
Member

John I can only go by what I know about BT and I can tell you this they have some of the best City lawyers and accountants at their disposal as well as a very well set up legal department which in the past at least have taken to court and won damages against those who thought they could get away without BT getting redress .Many businesses have made a BIG mistake and so have many subscribers trying to dodge payment , many have been cut off for good by BT for fraud , you will never read about it because BT keeps it a secret but there is going to be a lot of people who have ideas of making a fortune out of BT being taken to court , even the High Court . If BT thinks its in the right it goes all the way –I have seen it . I have seen BT walk all over arrogant people no matter who they are . You can bet your bottom $$ this is going to cost the general public AND the economy a LOT of money in the end .

Profile photo of John Ward
Member

I never had any doubt about that whatsoever, Duncan, and I mentioned it in my comment. But with the automatic compensation scheme the bill for an outage will leap up enormously and I suspect that with the best will in the world, and with the best lawyers, BT will struggle to make it stick in some cases. I think Ofcom needs to take account of that and not automatically assume that BT and the others will always get their compensation repaid.

Now that more telecom services have been undergrounded and digitally mapped for the public utilities, more redundancy and diversionary capacity has been installed in the network, and most trunk communications are by microwave links, the number of disruptions by others should be at an all time low, but they still occur due to mistakes and incorrect data. However, I think weather-related incidents are going to be the biggest problem for the compensation scheme whether it’s poles brought down or underground chambers flooded. One incident could affect hundreds of subscribers at a cost of £10 a day each [after the first two days] and with no prospect of recovery.

Profile photo of duncan lucas
Member

Which -now I am getting JSON errors on your server -another black webpage with the info on it , what with no emails , its getting near collapse ?

Profile photo of John Ward
Member

Duncan – Our comments are not routinely monitored so it is probably best to send an e-mail direct to conversation.comments@which.co.uk or use the ‘Get in touch’ report form under the ‘Need help?’ section on the ribbon across the top of the page.

Profile photo of duncan lucas
Member

Thanks for that John .

Profile photo of Lauren Deitz
Member

Hi Duncan, apologies but I thought this had now been fixed. Are you still unable to subscribe to emails?

Profile photo of alfa
Member

I can’t subscribe to emails either @ldeitz

Profile photo of Lauren Deitz
Member

🙁 Ok, I’ll investigate. I thought this was sorted.