Ofcom Raise Automatic Compensation Payouts for UK Broadband Woes
The UK telecoms, internet and media regulator, Ofcom, has recently increased the payment amounts issued to consumers under their automatic compensation system, which requires some broadband ISPs to compensate customers (cash or bill credits) for internet connectivity mishaps and installation delays.
The voluntary system, which first launched all the way back in April 2019 (full summary), was until last month designed to compensate consumers by £9.33 per day for delayed repairs following a loss of broadband (assuming it isn’t fixed within 2 working days). Missed appointments could also attract compensation of £29.15 and a delay to the start of a new service would be £5.83 per day.
However, the compensation amounts are designed to increase in April every year (in line with inflation), which is based on the Consumer Price Index (CPI) as of 31st October in the previous year. This is perhaps a little bit awkward now since, on the flip side, Ofcom are separately preparing to ban mid-contract price hikes for consumers that are linked to inflation or % based changes (here).
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In any case, the change means that member ISPs will now need to pay out £9.76 per day for delayed repairs, £30.49 for missed appointments and £6.10 per day for a delay to the start of a new service. One catch with this is that higher payments can indirectly contribute to general bill hikes and often discourage other ISPs from joining – especially smaller providers, due to the high cost and technical requirements (new systems needed .) of supporting the scheme. We should point that some of those self-excluded providers already have their own approaches to compensation.
Take note that this change was actually introduced right at the end of last month, but we’re playing catch-up today after overlooking it during the Easter Holiday period.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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I’m not sure what my view is on auto compensation. £9.76 per day that an outage goes on for more than 2 days sits in a space where it wipes out the margin on a product while also not being enough to cover someone’s increased costs from having to e.g. commute into their office. It’s also possible that it will dissuade altnets from offering the service to homes where the install looks more complicated, but I suppose as long as it remains optional for ISPs then there’s no problem.
Has anything been published regarding whether the compensation scheme is improving performance of the ISPs that choose to take part?
Have to agree, it is a difficult. I think some expectations of availability for £50 or whatever per month is unrealistic but equally there should be SLAs to prevent excessive periods. The one certainty is anything government related will end up costing everyone more. I depend upon broadband for work so have 5g backup.
I think in certain cases the ISP could offer an alternative, for example, years ago my parents were with Sky Mobile and were switching to Sky Broadband.
The switch was delayed with my parents left disconnected, what would have been practical, but they couldn’t offer, was more mobile data.
In the era of e-sims, theoretically it should be easier to setup customers to have at least some fallback during these types of scenarios.
@Jonny where the provider is using an Openreach tail, Openreach will pay compensation to the provider who then passes that on to the customer. For Altnets building their own network, there should be plenty of margin for them to cover compensation for a customer outage, and if it is a longer outage caused by damage to their network by a 3rd party then they should be going after said 3rd party for their own compensation.
“In the era of e-sims, theoretically it should be easier to setup customers to have at least some fallback during these types of scenarios.”
e-sim provisioning requires an internet connection and a compatible device. not too useful if you’re already down – and arguably there’s a large section of a big ISP’s customer base who wouldn’t know what to do with it anyway.
I thought the BT approach was reasonable. Even when you didn’t pay for the 4G backup device, if on a more expensive tariff they could immediately enable unlimited data on any associated BT mobile services & could send out a mifi style device for next day delivery.
@Ivor
My idea was aimed more at people who already have a smartphone and therefore likely to have an internet plan as well, albeit one that isn’t suitable for a high amount of data e.g. 4GB plans.
I had thought of your suggestion, but the reason I went with e-sim is because that could have minimal delay, which depending on the nature of the fault/timescale may be better.
Either way, I think that providing working mobile data in a convenient way could be considered as an alternative to purely financial compensation.
I got a customer currently that has so much compo coming that’s their service paid up for the next 3-4 years. It’s stupid considering not even a leased line customer gets that much.
They very much do.
The compensation from non-members can be simply the daily service charge, so certainly doesn’t cover the cost of short term alternatives. If Openreach automatically give the provider compensation, it would be possible for the isp to make a profit from not pushing Openreach to perform a timely repair.
Ignoring how pointless this is in that it doesn’t fix the issue itself, surely Ofcom should raise it by CPI + 3.9% or whatever – like they do to customers?!
This all sounds good but isn’t as simple as it’s made out to be in real world.
ofcom are waste of time and a puppet to the industry
“voluntary system” that itself is a disgrace every one should be forced no matter whos network etc it is to join this.
Fee are not high enough when you think about a person could be missing a days work because of this and the effort as well people have to do chasing. (these are not even minimum wage rates)
If these payouts was high they would have to get act together or would go bust.
I don’t like how people who have had bodge job work done do not receive any compensation.
They would also charge a lot more to cover the costs. Full on business services have these kinds of guarantees: check the pricing on them.
” Fee are not high enough when you think about a person could be missing a days work because of this ”
it’s a consumer grade, best effort service. If you are relying on it to work from home, then you should be paying for an appropriate service or services.
It doesn’t even have to be a leased line as even business broadband services can have better SLAs, though that in itself won’t isn’t infallible. You could also consider a mobile backup (either self provided or an ISP that offers bundled solution). Or multiple lines, ideally using different infrastructure providers if available.
Vodafone keep telling me that I would get compensation everyday until my fttp was activated upto 60 days, it took them 63 days to get it activated and have just paid me for 3 days, so as soon I get home from working away I’ll be going into Vodafone to find why I’ve not received the full payment of £350
Customers should make sure they have a backup for their service if their connection is so vital to them.
I work from home and pay £18 a month for unlimited data on my mobile. I rarely use much data, but the unlimited nature of it saves me an 80 mile round trip to the office should my connection go down.