Several prominent UK business groups have penned an open letter to Ofcom chief executive Dame Melanie Dawes calling on the regulator to expand the automatic compensation scheme for broadband outages to cover all businesses.

The British Chambers of Commerce, the Federation of Small Businesses, and the Institute of Directors cited research from Vorboss claiming that more than half of UK fixed business connectivity customers experienced one or more outages in the past year, costing the economy approximately £17.6 billion in lost economic output.

According to the data the average UK business lost around £11,000 in economic output due to connectivity outages, but an average of only £7.53 in direct financial compensation would have been available for the outage time, with 61% of businesses not receiving any compensation.

In April 2019, Ofcom launched an automatic compensation scheme for consumers affected by outages, claiming in a review of the scheme in 2020 that 80% of broadband and landline customers were covered, and that the initial five signatories to the scheme, including BT, Sky, TalkTalk, Virgin Media and Zen Internet, had paid over £20.7 million.

Following that success, business groups want regulation to provide cover for commercial customers. Currently, some telecom providers offer compensation for outages to some degree, for example BT offers compensation to some SMEs, while Vodafone UK and Three offer compensation for business customers on a “case-by-case basis”.

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In their letter, leaders from the business groups said: “Connectivity is a key enabler of economic growth. 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.

“Supporting businesses to increase productivity and economic growth is critical, and solutions which drive improvements in UK connectivity infrastructure will play an important role in achieving this.”

Earlier this year, new research from the broadband ISP Beaming found that UK businesses lost over 50 million hours and £3.7 billion due to internet failures in 2023, with companies experiencing 8.8 million internet failures, and 15% losing money the moment their connectivity fails.