Openreach and UK ISPs Still Far Apart on Automatic Compensation

The Office of the Telecoms Adjudicator (OTA) has said that ISPs and Openreach “remain some distance apart” from an agreement on payments as part of Ofcom’s forthcoming automatic compensation system, which will force providers to compensate consumers for a total loss of broadband connectivity.

The voluntary system, which is expected to be adopted by all of the UK markets largest broadband ISPs (full details), requires providers to compensate consumers by £8 per day for delayed repairs following a loss of broadband service (assuming it isn’t fixed within 2 working days). On top of that missed appointments would also attract compensation of £25 and a delay to the start of a new service would be £5 per day.

However ISPs were quick to point out last year that Ofcom’s system largely overlooked responsibility from the supplier side, which is a particular problem when considering Openreach’s national infrastructure. Many of the broadband faults experienced by related ISPs will physically occur on Openreach’s side of the network.

Strictly speaking this is a contractual matter between ISPs and their suppliers, although Ofcom did agree that “any changes to Openreach’s commitments which may be necessary to reflect the requirements of an automatic compensation scheme should be the subject of industry negotiations.”

Since then the OTA has been busy facilitating related discussions over revised Service Level Guarantees (SLG) with Openreach, regarding their additional end-customer compensation obligations, but the two sides still appear to be quite far apart.

OTA Statement

To date, there have been two Openreach offers; both broadly aligned to the overall quantum of cost referenced within the Ofcom [Wholesale Local Access] Statement. CPs have responded to both seeking higher SLG payments that align with the proposed [Voluntary Code of Practice] payments. Both sides, therefore, remain some distance apart.

The technical enhancements for supporting KCI messages, required to assist compliance, are largely agreed and the development remains on track.

Nobody ever expected such negotiations to be easy and the regulator has previously hinted that they would be willing to step-in if no agreement could be reached, but we’re not yet at that stage. Ofcom is well aware that implementing such a system would be complicated and as such they don’t intend to begin enforcing it until early 2019.

A Spokesperson for Openreach told ISPreview.co.uk:

“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 also fully supported Ofcom’s voluntary Code of Practice since its inception, and have committed to invest heavily in systems and automatic compensation payments as a result of the new code.

We’re still in discussions and working closely with Ofcom and our Communications Provider customers to consider the best way to implement it.”

We should add that most faults tend to be resolved within 2 days, although the regulator has estimated that up to 2.6 million UK customers could still receive up to £142 million per year in automated compensation payments. Ofcom believes that the changes will offer “incentives for providers to improve service quality“, although it seems equally likely to result in all of us paying higher prices for our broadband connections.

Some consumers may also face confusion as not all connectivity problems stem from your broadband ISP (e.g. incorrect home network configurations, weak WiFi signals, faulty devices etc.).