Major UK business groups are calling on UK telecoms regulator Ofcom to expand the automatic compensation scheme for broadband outages to cover all businesses.
Currently, a voluntary system introduced in 2019 offers compensation to consumers for delayed repairs, missed appointments, and new service delays. This system – adopted by several ISPs – typically provides consumers with £9.76 per day for delays exceeding two working days, provided the outage originates from the ISP’s network and not the customer’s premises. Missed appointments can result in £30.49 compensation, while delays to new service activations attract £6.10 per day.
While Ofcom’s existing compensation scheme does cover some business lines, its scope is limited to those sold as domestic-grade fixed-line broadband services. The the British Chamber of Commerce (BCC), Federation of Small Businesses (FSB), and Institute of Directors (IoD) argue that this limited coverage is insufficient and urge the regulator to implement a more comprehensive scheme that encompasses all business connections.
In a letter to Ofcom Chief Executive Dame Melanie Dawes, the group stressed the crucial role reliable connectivity plays in economic growth.
“Connectivity is a key enabler of economic growth,” the letter states. “We know from our members that having access to resilient and reliable connectivity helps all types of businesses to operate successfully. And that loss of connectivity has a significant impact on productivity.”
Highlighting the stark reality of unreliable connectivity, the group cited research by Vorboss revealing that over half of UK businesses experienced at least one connectivity outage in the past year, resulting in a staggering £17.6 billion loss in economic output.
“This shows that even small improvements in network resilience would result in significant productivity benefits to the UK economy,” the letter argues.
The group further criticises the current compensation landscape, pointing out that despite widespread outages, 61% of businesses received no compensation. This echoes Ofcom’s own findings raising concerns about service quality and compensation within the business broadband market.
Drawing parallels with Ofcom’s successful implementation of automatic compensation for residential consumers, the group urges the regulator to extend and strengthen the scheme for businesses.
“By compelling network operators to automatically compensate customers for outages, the scheme incentivised networks to improve network reliability and reduce outages,” the letter notes.
The group believes an expanded and robust automatic compensation scheme would offer multiple benefits:
- Improved network resilience and fewer outages: Leading to significant productivity gains for the UK economy.
- Competitive advantage for providers: Providers exceeding the scheme’s requirements could differentiate themselves in the market.
- Increased trust in compensation claims: Businesses would be reassured that compensation for outages is readily available and reliable.
“Supporting businesses to increase productivity and economic growth is critical,” the letter concludes, “and solutions which drive improvements in UK connectivity infrastructure will play an important role in achieving this.”
The call for expanded automatic compensation highlights the growing frustration among UK businesses grappling with unreliable broadband services and underscores the need for concrete action from Ofcom.
(Photo by Jadon Kelly)
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