Automatic Compensation Will be Available for Broadband Users

Openreach (BT) and five other major retail ISPs have come to an agreement regarding Ofcom’s new automatic compensation system.

The system, which ISPs sign up to voluntarily, requires the ISPs to compensate their customers for “a total loss of fixed broadband and phone connectivity”, with an intended start date of early 2019. Customers will be compensated with £8 for each day of delayed repairs after the loss of a broadband service. Missed appoints are compensated with £25 and if the start of a new service is delayed, the customer will be given £5 per missed day. Most problems are repaired within two days, in which case compensation will not apply.

Ofcom told the ISPs that they would also have to pay “during highly contentious force majeure-type events”, such as damage done through extreme weather or strikes. This rule will only apply to the retail providers and not their network suppliers.

This rule caused upset among the ISPs, largely because “many of the broadband faults experienced by related ISPs will physically occur on Openreach’s side of the network”.

It was ruled by Ofcom that these issues needed to be negotiated within the industry and the Office of the Telecoms Adjudicator facilitated these discussions.

The ISPs wanted Openreach’s Service Level Guarantee payments “to reflect the impact they’d suffer from Ofcom’s new Code”, but Openreach disputed this.

Now the industry has passed its 6-month period of OTA facilitation and they have come to an agreement, though this includes a year-long review of Cancelled Provisions.

A spokesperson for Openreach, said: “Automatic compensation is the right thing to do for customers, and that’s why we’ve been proactively compensating our wholesale customers for every appointment we miss, and any delays to repairs and provisions, since 2008.

We have fully supported Ofcom’s voluntary Code of Practice since its inception, and are pleased to have reached an agreement with those Communication Providers intending to offer automatic compensation.

Automatic compensation will not be paid when there are measures beyond our reasonable control, caused by events such as flooding. This is a well understood exclusion which operates under our existing Service Level Guarantee (SLG) arrangements.”

According to ISPreview.com, Openreach’s final offer to the ISPs was likely to be far more generous than it was previously and will “cover for third-party delays”.

Ofcom has also established tougher Quality of Service standards in order to push for improvement from Openreach. Openreach has also said that it would pay compensation when “others prevented it from accessing its network”, for example if it is unable to access a pole located on private land. However, Openreach maintains its position to not pay compensation for the “force majeure-type events”, which means this cost is pushed onto the ISPs.

Mark Jackson, journalist and IT consultant, said: “Openreach’s steadfast position not to pay out during “force majeure-type events” has caused some irritation, particularly while Ofcom continues to insist that retail ISPs will have to cover the cost of that themselves”.

In the past, Ofcom estimated that up to 2.6 million customers in the UK would receive up to £142 million every year through the new automated compensation payment system. This will almost certainly affect service cost, which explains why all of the smaller ISPs have not signed up to the system.

Fiona Dattan

Read all articles