Ofcom imposes automatic compensation payments on UK ISPs

Most UK internet service providers have signed up to a scheme that will see them automatically compensate their customers for their failures.

Ofcom reckons UK internet subscribers will be due £142 in payouts at current levels of ball-dropping, which will be nine times more than they currently get. While that’s obviously good news for consumers, the amounts involved still seem pretty poor compensation for not being able to get online.

The first lot of £8 only kicks in after you’ve been starved of Netflix, or whatever else you might use your internet connection to watch, for two full days, which seems a bit unsatisfactory. The missed appointment fine is a bit more substantial but the switch-over delay payment is even less.

Apparently ISPs only cough-up 15% of the time they blow it right now, so this is definitely a step in the right direction. BT, Sky, TalkTalk, Virgin Media and Zen Internet have all said they’ll introduce this automatic compensation, with other BT-owned ISPs expected to follow suit. The cash should be automatically deducted from ISP bills, with Ofcom threatening to review it after a year and have a word with any transgressors.

“Waiting too long for your landline or broadband to be fixed is frustrating enough, without having to fight for compensation,” said Lindsey Fussell, Ofcom’s Consumer Group Director. “So providers will have to pay money back automatically, whenever repairs or installations don’t happen on time, or an engineer doesn’t turn up. People will get the money they deserve, while providers will want to work harder to improve their service.”

The most significant impact of this should be to make ISPs prioritise customer service more than they currently seem to. If some senior exec thinks their annual bonus will be hit due to engineers dragging their feet you can bet sorting that out will move right to the top of their priority list, just below golf meetings and power lunches.

The Elephant in the room, of course, is Openreach, which manages much of the fixed line network. It looks like Ofcom hasn’t been very clear about how these automatic payments may be passed on to Openreach if it’s found to have been at fault.

“ITSPA welcomes this important step towards increased protection and redress for consumers who are left without a service due to no fault of their own,” said Eli Katz, Chair of the Internet Telephony Services Providers’ Association. “This approach goes towards assuring continuity of our members’ services. However, ITSPA is disappointed that Ofcom has not been clear on how the regime will be applied to underlying infrastructure providers, such as Openreach, as it is on their networks that faults usually occur. It is a shame that clear rules regarding their payment obligations have not been set out.”