Ofcom orders broadband industry to compensate let down consumers but will it be enough to improve service?

Getting a credit of £6 off your bill for every day your service is delayed doesn't sound like a lot when you consider the inconvenience of missing out on broadband 

James Moore
Chief Business Commentator
Friday 24 March 2017 18:09 GMT
Broadband has become an essential service
Broadband has become an essential service

A question many people might ask of communications watchdog Ofcom on the subject of its plan to force broadband providers to automatically compensate them for service fails: what took you?

The regulator has launched consultations on a plan to provide customers with automatic payments “without having to go through a potentially lengthy and difficult claims process” if any one one of three things happen.

If your landline or broadband isn’t fixed quickly enough, if your new service isn’t up and running on the promised day, or if an engineer misses a scheduled appointment, congratulations: you’re going to get paid.

Not before time, given the level of dysfunction in the broadband industry. According to Ofcom’s own figures there are 5.7 million cases of customers experiencing a loss of service every year, engineers miss a quarter of a million appointments, around one in eight new installations are delayed, affecting 1.3m people.

If you’re lucky, and kick up a big fuss, you might get a few quid, but most people are simply left to suffer in silence until the problem gets fixed.

Broadband, in particular, has become an all but essential part of modern life. A huge range of services have migrated on to the Internet, both state and private. The patchy nature of provision in rural areas – scandalous by the way – blights the lives of people living there. Try losing Netflix for a day when you have it.

I know the latter sounds trivial. It might do some families some good to, you know, talk (and yes that applies to mine too). But being forced into that position as a result of a utility’s slapdash approach to service is simply unacceptable.

The problem at the moment is that the incentives to do better aren’t sufficiently strong. Switching is a good idea if it saves you money. But there are no guarantees that you will do any better when it comes to service. And you put yourself at risk of the problems the watchdog wants to fix by doing so.

BT’s Openreach is the cause of a lot of problems too. Most broadband providers use its network and it remains to be seen whether Ofcom forcing its legal separation within the BT group will dampen their consistent angry complaints about the company. Forcing them to compensate their customers when Openreach is at fault? I’d imagine that will spark demands for the re-negotiation of service agreements as a matter of urgency.

The industry has proposed its own solution, which would see compensation paid through a voluntary code. But it only involves three providers and industry solutions on matters like this almost always favour the industry as opposed to their customers. As Ofcom has rightly recognised.

However, the redress it is proposing doesn’t look particularly generous. You get £6 a day when your new service is delayed, £10 a day if a repair isn’t conducted within two working days, £30 if an appointment is missed. But, to its credit, the regulator says it wants to hear from you if you don’t think that’s enough. Assuming your broadband provider hasn’t messed up your service, you can respond via its website.

I’d urge you to do that. The cost to the industry of the measures Ofcom is proposing has been put at £185m, and the £185m question is whether that will represent enough of a drag on profits to motivate broadband providers to pull up their socks. After all, it isn’t unknown for businesses to cynically accept penalties as part of the cost of doing business. Banks did that for years.

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