As part of its Strategic Review of Digital Communications, on 22 March 2017, Ofcom announced proposals requiring fixed broadband and landline telecoms providers to pay automatic compensation to customers who suffer from certain poor kinds of service. Ofcom’s research shows that whilst most consumers are generally satisfied with their telecoms services, a significant minority still experience problems. Ofcom’s Consumer Group Director, Lindsey Fussell, has commented that “this would mean customers are properly compensated, while providers will want to work harder to improve their service”.

The proposals seek to reimburse customers based on the level of harm suffered, if:

  • Landline or broadband services are not fixed promptly – £10 for each calendar day that the service is in disrepair where a service has stopped working and is not fully fixed after two full working days. Ofcom’s analysis suggests that each year, 5.7 million consumers experience a loss of their landline or broadband service.
  • Service deadlines are missed – £6 for each calendar day of delay (including the missed start date) where a new landline or broadband service is not up and running on the date promised. Ofcom estimates around 12% of landline and broadband installations are delayed each year.
  • Service engineer appointments are missed – £30 per missed appointment where a service engineer does not arrive for an appointment as scheduled, or cancels with less than 24 hours’ notice. According to Ofcom, engineers fail to arrive for around 250,000 appointments per year.

Ofcom estimates that its proposals could result in an extra £185 million of compensation payable to up to 2.6 million consumers per year. Whilst Ofcom welcomed a draft industry voluntary code of practice submitted by the UK’s three largest landline providers, it considers the joint proposal does not currently go far enough to address its concerns. All stakeholders are invited to respond to the relevant consultation “Automatic Compensation – Protecting Consumers from quality of service problems” by 5 June 2017, following which Ofcom plans to publish a decision statement by the end of 2017.

To view Ofcom’s consultation on automatic compensation, click here.

Claire Wiseman
Claire Wiseman
Senior Associate and Professional Support Lawyer, Digital TMT and Sourcing, London
+44 20 7466 2267