UK ISP Vorboss, which is investing £300m to deploy a 100Gbps full fibre network (Ethernet and broadband) – dedicated to business – across central London, has today begun lobbying Ofcom to introduce automatic compensation for business networks in order to help “drive competition on quality and reliability” in the market.
The voluntary system (full summary), which was first introduced in 2019, typically requires member ISPs to compensate consumers (cash or bill credits) by £9.76 per day for delayed repairs following a loss of broadband (assuming it isn’t fixed within 2 working days). Missed appointments could also attract compensation of £30.49 and a delay to the start of a new service would be £6.10 per day.
However, Vorboss believes “now is the time to introduce a comparable scheme to protect UK businesses“, which they say reflects their own study into productivity (Assembly Research was commissioned to conduct this). The report claims that the UK economy has suffered a loss of £17.6bn in economic output over the past 12 months due to “connectivity outages“. The total for London was £5.7bn, representing just over 1% of London’s GDP.
Some 51% of businesses with a fixed business internet contract reported that they experienced at least one loss of service in the past year – that figure rises to 60% for London’s businesses (note: it’s unclear if this was due to a local network issue or ISP connection). Almost a fifth (19%) of businesses reported experiencing three or more outages in the past year – again, that figure increases in London, with 28% being hit three or more times.
Yet, 61% of businesses that experienced an outage did not receive any compensation. Of those that didn’t ask for it, the two most cited reasons were that requesting compensation was not worth the time and effort (44%) and they didn’t expect to get compensation (34%), even though many providers do offer Service Level Agreements (SLAs) where compensation plays a role. But a lot of businesses seem to be unaware of this.
Tim Creswick, Founding CEO of Vorboss, said:
“As the data in this report shows, the productivity uplift that would come from improved network quality is massive.
We should all be incentivised to compete on quality – that would force an uplift in network performance, and in turn drive a much-needed economic boost.
Ofcom’s introduction of automatic compensation in the consumer market has been a success, pushing service providers to improve quality, while giving customers reassurance that compensation is real and tangible. If the scheme was extended to include businesses, we would see the same benefits, along with a significant productivity boost to London and the UK economy through reduced outages.”
An Ofcom spokesperson said:
“We constantly keep the market under review, and we’ll consider the research Vorboss has submitted to us. Following consultation, we’ve previously introduced automatic compensation for residential customers, as well as rules that mean providers of products and services to SMEs need to provide clear and accessible information on the service levels and compensation they offer.”
However, it’s worth noting that Ofcom’s existing scheme does in fact cover some business ISP networks too, albeit specifically those that sell domestic grade fixed line broadband services. In other words, Vorboss seem to be seeking for the regulator’s rule to be extended into areas like Ethernet connectivity and leased lines, which should already be covered by SLAs. This is also an area where we’d expect larger businesses to have greater competency in their contract arrangements and network setup.
Not to mention that a competent business would know to ensure that they have access to good redundancy for when their main link fails, although some clearly do not. Suffice to say that we’re not quite as convinced as Vorboss that automatic compensation is strictly necessary for premium connections, which would also be a much more complex field for the regulator to set standardised pricing around. On the other hand, it is clear that some businesses with these types of connections could do with more support, particularly in terms of education around SLAs, availability of compensation and redundancy.
The real reason for this news is that Vorboss are today launching automatic compensation to new and existing business customers served by its network, across both direct and wholesale channels. If Vorboss business internet goes down for more than four minutes, customers will automatically be compensated with at least one day’s worth of “service credits“. If it is down for more than 24 hours, customers will receive the full pay-out of two months’ worth of service credits.
