Major UK business groups are urging telecoms regulator Ofcom to extend the automatic compensation scheme for broadband outages to encompass all businesses. This demand highlights frustrations over unreliable broadband services impacting productivity and economic growth.
A voluntary system, introduced in 2019, currently compensates consumers for service disruptions originating from the ISP’s network. This scheme provides £9.76 per day for delays exceeding two working days and £30.49 for missed appointments. However, this system mainly covers domestic-grade fixed-line services.
Leading business organisations – the British Chamber of Commerce (BCC), Federation of Small Businesses (FSB), and Institute of Directors (IoD) – assert that this limited coverage is insufficient. They advocate for a more comprehensive scheme that includes all business connections. In a letter to Ofcom Chief Executive Dame Melanie Dawes, the groups emphasised the critical role of reliable connectivity.
“Connectivity is a key enabler of economic growth,” they noted. “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.”
Research by Vorboss has shown that over half of UK businesses experienced at least one connectivity outage in the past year, leading to a £17.6 billion loss in economic output. Despite these widespread outages, 61% of businesses received no compensation. This aligns with Ofcom’s findings, which have also raised concerns about service quality and compensation in the business broadband market.
The organisations draw attention to the success of Ofcom’s automatic compensation for residential consumers, which incentivised network operators to improve reliability. Extending a similar scheme to businesses could yield multiple benefits. Improved network resilience can lead to significant productivity gains for the UK economy. Additionally, providers meeting or exceeding compensation requirements could gain a competitive advantage by differentiating themselves in the market.
Moreover, an expanded scheme would increase trust in compensation claims, reassuring businesses that compensation for outages is available and reliable. The call for enhanced automatic compensation underscores the necessity for Ofcom to take more concrete action. Broad support from major business groups signifies the strong demand for more robust measures to mitigate the impact of broadband outages on the UK economy.
