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Late last week news emerged that a German court had found Internet access to be an ‘essential part of life’ and an ISP had been ordered to pay compensation to a customer who had suffered from a loss of DSL service for 2 months in 2008/9. This unusual decision prompted us to ask, can we really compensate for broadband outages and how would that work in reality?

Neil Watson, Head of Service Operations

Neil Watson, Head of Service Operations

Whilst end user broadband customers are probably jumping for joy at this remote possibility, in reality such a practice really isn’t practical and here’s why:

The wholesale channel
Firstly, we believe this would never work in practice because of the UK’s channel supply model. Most UK providers are reliant on Openreach to fix faults and maintain the major BT based network which runs throughout the UK. In addition to this, unless they are LLU or cable based operators, they purchase their services through BT Wholesale and many then sell these services on to reseller partners who in turn sell to end user customers. So consider for a minute, who would pay the compensation? The end user would claim from the reseller, who would try to claim from their wholesale provider, who would in turn try to claim from either BT Wholesale or Openreach – you can imagine how much time and red tape that would cause!

Underlying PSTN faults
That process would be complicated even further where the underlying PSTN line is provided by an alternative provider. What happens if the broadband service goes down because the PSTN had a fault? Then who would be liable?

Customer related faults
So far we’ve presumed the fault is a genuine network based issue but we see a variety of reasons for faults occurring and many factors can affect the performance of a broadband service. What if the fault is proven to actually be because of the customer’s equipment, or because of the next door neighbour’s Christmas lights are causing electrical interference?

The cost and how it would be covered
Even if it were practical to provide compensation, who would decide how much was acceptable and what would be the criteria? Regardless of the amount agreed, it’s inevitable that the ISPs will need to factor that potential cost into their service charges, potentially meaning a rise in charges for customers in what is already an extremely price sensitive market.

What about service performance?
We also need to consider where to draw the line on this. Would compensation only be paid for complete lack of service over a set period of time or would payments be agreed for intermittent service or degraded performance over the time? How would that be measured accurately and agreed between the end user and the ISP? Who decides what constitutes a degraded service? One customer’s perception of a poor service may be viewed as perfectly acceptable by another.

Maybe you’re thinking “Well you would say all that wouldn’t you, you’re an ISP and would therefore have to pay out on these compensation claims!” While it’s true any supplier would want to avoid ambiguous compensation claims, we simply believe that such a system isn’t practical for broadband, especially when it comes to managing customers’ expectations and acknowledging that fault resolution can be a very complicated.

At the end of the day, if your end user customer really needs a guaranteed service with compensation clauses and SLAs, there are additional connectivity solutions available such as Ethernet over copper, EFM and leased lines.

For now, only Germany seems to think this system is plausible but it’s an interesting discussion to have.

Have your say!
Well, you’ve heard what we think but what do you think about this? As a reseller partner and an ISP would you be prepared to pay out compensation for DSL loss of service? Do you think that such a system is fair for the end user and the ISPs or do you think it would be impractical? Let us know your thoughts by leaving us a comment below.

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