250,000

BT, Virgin and Sky want to block automatic compensationp for customers

Missed appointments every year to fix household broadband

people know they canan get a cheaper broadband deal by switching internet service provider (ISP), but many are put off by the hasslele involved. One of the main worries is being without an internet connection while the switch takes place, a very frustrating process that often takes weeks.

This is one of the reasons why Ofcom is proposing compulsory ‘automatic compensation’ for customers who can’t get online, replacing the current voluntary scheme. The regulator hopes that guaranteeing a refund will encourage more people to switch.

Ofcom says that a provider should pay new customers £6 for every day it doesn’t install a service beyond the promised start date. Existing customers would also be able to claim refunds: £10 a day for no service (after two working days), and £30 for missed or cancelled appointments with less than 24 hours’ notice.

These are hardly fortunes, but even so providers are fighting hard to avoid paying them. BT, Virgin Media, Sky and others have outlined plans to keep compensation voluntary, cutting the £30 refund for missed appointments to £20, and the £10 no-service payment to just £7.

A quick look at the facts tells you why. Ofcom says every year there are 5.7 million cases of customers losing their landline or broadband, while engineers fail to turn up to around 250,000 appointments. Such incompetence would quickly prove very costly. Citizens Advice estimates that the reduced compensation proposed by companies would save them £52m a year.

But this is tiny compared with the £874 million that Citizens Advice claims people lose in lost earnings annually while waiting for services to be fixed.

At the heart of the debate is the status of broadband. Is it an essential utility, like water, gas and electricity? Companies providing those services must pay automatic compensation, usually through cash or credit added on people’s bills. Richard Neudegg, head of regulation at broadband-switching company uswitch.com, says that “diluting” the plans for compensation “sends the wrong kind of message to customers – that broadband isn’t the vital utility that we’ve come to believe”.

So it’s a strange kind of irony that by resisting calls for automatic compensation, broadband providers seem to be saying that their service isn’t crucial.

There have been many calls for Ofcom to get tough on ISPS. Gillian Guy, head of Citizens Advice, says that Ofcom must “introduce a compulsory automatic compensation scheme that clearly lays out how much consumers are entitled to”.

Other leading figures agree. Conservative MP Grant Shapps, chair of the British Infrastructure Group, told Computeractive that it would be “unacceptable” for Ofcom to let providers set their own levels of compensation.

But the regulator will also

take seriously the claim from ISPA (Internet Services Providers’ Association) that Ofcom’s suggested levels of compensation are “out of proportion compared to the generally low prices that consumers currently pay”.

It also warns that higher refunds mean less money for companies to invest in UK services.

Customers must come first though. Citizens Advice says that only 15 per cent of those who complain to ISPS receive any compensation; in contrast, 30 per cent get refunds from energy companies. Ofcom needs to fix this imbalance.

Customers would get £10 a day for no service, and £30 for missed appointments