DEBATE PACK Number CBP 2016/0061, 7 March 2016

Debate pack: BT service Daniel Rathbone Nikki Sutherland standards

Contents

This pack has been produced ahead of the debate on BT service standards to 1. Summary 2 be held in Westminster Hall on Wednesday 9 March at 9.30am. The Member in 1.1 Strategic charge is Caroline Nokes. Review 2 1.2 Ofcom Statistics 2

2. News Articles 3 3. Press releases 4 4. PQs 15 5. Useful links and further reading 18

The House of Commons Library prepares a briefing in hard copy and/or online for most non-legislative debates in the Chamber and Westminster Hall other than half-hour debates. Debate Packs are produced quickly after the announcement of parliamentary business. They are intended to provide a summary or overview of the issue being debated and identify relevant briefings and useful documents, including press and parliamentary material. More detailed briefing can be prepared for Members on request to the Library.

www.parliament.uk/commons-library | intranet.parliament.uk/commons-library | [email protected] | @commonslibrary 2 Number CBP 2016/0061, 7 March 2016

1. Summary 1.1 Ofcom Strategic Review Ofcom has highlighted improvements in quality of service across the whole telecoms industry as one of its priorities in the initial conclusions of its Strategic Review of Communications in February 2016. Ofcom state that they will make a number of changes to improve customer service including publishing performance tables on quality of service and introducing automatic compensation for consumers: Ofcom intends to introduce a range of measures designed to ensure that all phone and broadband companies provide the quality of service that customers expect. First, will be subject to tougher, minimum requirements to repair faults and install new lines more quickly. These will build on measures introduced by Ofcom in 2014, but will set higher minimum standards and extend to other aspects of performance, such as how often faults occur. Second, Ofcom will introduce performance tables on quality of service, identifying the best and worst operators on a range of performance measures so that customers can shop around with confidence. Third, Ofcom intends to introduce automatic compensation for consumers and businesses when things go wrong. Broadband, landline and mobile customers will no longer have to seek redress themselves, but will instead receive refunds automatically for any loss or reduction of service.1

1.2 Ofcom Statistics Ofcom publishes quarterly statistics on the number of customer complaints it receives about companies that provide fixed line telephone, fixed line broadband, pay monthly mobile and pay TV services. The most recent statistics, published on 15 December 2015, for Q3 2015 show that Ofcom received 22 complaints about BT per 100,000 customers for landline telephone services compared to an average for 17 per 100,000 across all operators. They also received 35 complaints about BT broadband services per 100,000 customers compared to an average of 22 per 100,000 customers across all operators.

1 Ofcom, Strategic Review of Digital Communications, 25 February 2016

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2. News Articles

Aberdeen Press & Journal BT ‘not good enough’ in the Highlands 9 February 2016

Computer Weekly BT brings 1,000 customer service jobs back to UK Alex Scroxton 19 January 2016 BT is to create 1,000 jobs as part of its commitment to answer the majority of its consumer-facing service calls in the UK

Daily Telegraph BT and EE in customer service set-back as £12.5bn deal is cleared Kate Palmer 16 January 2016 BT and EE merger is approved as Ofcom research unveils poor customer service ratings

Financial Times BT will not extend Openreach’s dealings with consumers Daniel Thomas, Telecoms Correspondent 27 December 2015 BT will pull back from proposals to allow Openreach to deal directly with consumers when dealing with complaints, faults and delays after a consultation with the internet service providers that use its national network.

Guardian BT’s Openreach slammed for phone and broadband connection delays Anna Tims 29 June 2015

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3. Press releases

Ofcom Making digital communications work for everyone 25 February 2016

• BT must open up network, so competitors can connect fibre to homes and offices • Reform of Openreach to better serve UK consumers and businesses • • Better quality of service for all customers, including automatic compensation Ofcom has today set out how it plans to improve telecoms quality and coverage, so that UK consumers and businesses receive the best possible phone and broadband services. These are the initial conclusions from Ofcom’s Strategic Review of Digital Communications, announced last year, which is designed to make the UK a world-leading digital economy over the next decade and beyond.

Many of these measures affect all major phone and broadband providers. Others relate specifically to Openreach, the division of BT that maintains the UK’s largest phone and broadband network on behalf of competing providers. Ofcom’s decisions are designed to achieve: • A choice of networks for consumers and businesses. Openreach must open up its network of telegraph poles and underground tunnels to allow rivals to build their own, advanced fibre networks, connected directly to homes and offices. • Reform of Openreach. Openreach needs to change, taking its own decisions on budget, investment and strategy, in consultation with the wider industry. • Better quality of service across the telecoms industry. Ofcom intends to introduce tougher rules on faults, repairs and installations; transparent information on service quality; and automatic compensation for consumers when things go wrong. • Better broadband and mobile coverage. Ofcom will work with the Government to deliver a new universal right to fast, affordable broadband for every household and business in the UK. We also intend to place new obligations in future spectrum licences to improve rural mobile coverage.

Supporting investment to provide a choice of networks Ofcom is today announcing a new strategy to promote large-scale roll- out of new ultrafast broadband networks, based on cable and fibre lines, as an alternative to the partly copper-based technologies currently being planned by BT.

Supporting investment by rival providers will reduce the country’s reliance on Openreach, and increase competitive pressure on its network.

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To help bring this about, Openreach will be required to open up its telegraph poles and ‘ducts’ - the small, underground tunnels that carry telecoms lines. Using these, rival providers will be able to build their own fibre networks, connected directly to homes and offices.

Openreach must make it much easier for competitors to access this network, and provide comprehensive data on the nature and location of its ducts and poles. This new ‘digital map’ of the UK will allow competing operators to invest, plan and lay advanced networks, giving people more choice over how they receive their phone and broadband services.

A new model for Openreach

Openreach is part of BT Group, but has obligations to treat all its customers equally. Ofcom introduced this structure in 2005, and it has delivered benefits such as stronger competition.

However, the evidence from Ofcom’s review shows Openreach still has an incentive to make decisions in the interests of BT, rather than BT’s competitors, which can lead to competition problems.

For example, Openreach’s governance lacks independence from BT Group. The wider company has retained control over Openreach’s decision-making and the budget that is spent on the network, and other telecoms companies have not been consulted sufficiently on investment plans that affect them.

For these reasons, Ofcom has decided it is necessary to overhaul Openreach’s governance and strengthen its independence from BT. In future, Openreach needs to take its own decisions on budget, investment and strategy - such as the deployment of new networks. 6 Number CBP 2016/0061, 7 March 2016

Openreach management should be required to serve all wholesale customers equally, and consult them on its investment plans. There will also be greater transparency over how costs and assets are allocated between Openreach and the rest of BT.

Ofcom will prepare detailed proposals later this year to implement these changes. The new model might require Openreach to become a ring- fenced, ‘wholly-owned subsidiary’ of BT Group, with its own purpose and board members. If necessary, Ofcom reserves the right to require BT to spin off Openreach as an entirely separate legal entity, with its own shareholders.

A step-change in quality of service Ofcom intends to introduce a range of measures designed to ensure that all phone and broadband companies provide the quality of service that customers expect.

First, Openreach will be subject to tougher, minimum requirements to repair faults and install new lines more quickly. These will build on measures introduced by Ofcom in 2014, but will set higher minimum standards and extend to other aspects of performance, such as how often faults occur.

Second, Ofcom will introduce performance tables on quality of service, identifying the best and worst operators on a range of performance measures so that customers can shop around with confidence.

Third, Ofcom intends to introduce automatic compensation for consumers and businesses when things go wrong. Broadband, landline and mobile customers will no longer have to seek redress themselves, but will instead receive refunds automatically for any loss or reduction of service. Debate pack: BT service standards 7

Better broadband and mobile coverage Coverage of broadband and mobile services is increasing fast. More than eight in ten UK premises can now receive superfast broadband, and this is expected to reach 95% next year. Under Ofcom rules, 98% of homes and offices must receive an indoor mobile signal by next year.

However, Ofcom remains concerned about those who cannot receive an acceptable service. We will work with the Government to deliver the new universal right to fast, affordable broadband for every household and business in the UK. We also intend to place new obligations in future spectrum licences to improve rural mobile coverage.

Ofcom will also ensure that consumers have accurate and easy-to-use coverage information, to help them choose the best provider. This will place further pressure on mobile network operators to improve coverage.

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Last year, Ofcom launched a comprehensive map of mobile coverage by postcode for the whole UK. This will soon be updated to include broadband coverage, and we intend later to offer data for individual addresses.

Ofcom will soon consult on plans to make it easier for mobile customers to switch provider, to help increase competition in the market.

A better deal for telecoms users Sharon White, Ofcom Chief Executive, said: “People across the UK today need affordable, reliable phone and broadband services. Coverage and quality are improving, but not fast enough to meet the growing expectations of consumers and businesses. “So today we’ve announced fundamental reform of the telecoms market - more competition, a new structure for Openreach, tougher performance targets, and a range of measures to boost service quality. “Together, this means a better deal for telecoms users, which will improve the services and networks that underpin how we live and work.” Debate pack: BT service standards 9

Today’s initial conclusions explain next steps on all the policies arising from Ofcom’s review. For example, over the next year, Ofcom will: • set out new standards for Openreach and wider quality of service, together with details of how access to Openreach’s network can be provided; • prepare specific plans for discussion with the European Commission on Openreach governance and network access; • consult on introducing automatic compensation; • consult on making switching easier for mobile customers; and • publish the first performance tables for quality of service.

BT offers 'breakthrough' service to divert 'huge numbers' of nuisance calls 12 February 2016

We’re launching a "breakthrough" new service aimed at diverting millions of nuisance calls.

Most people receive an unwanted telephone call every month, mainly about PPI or personal injury claims, automated marketing messages or sales.

Now a BT team will monitor calls to our 10 million domestic customers and identify any patterns of callers.

The "rogue" numbers will be diverted to a junk voicebox, which we estimate will affect up to 25 million unwanted calls a week.

If you’re a BT customer, you’ll also be able to divert the calls yourself to the "Blacklist". The service will launch later this year, harnessing huge computer power to analyse data.

John Petter, chief executive of BT Consumer, said: "Nuisance calls are one of the great annoyances of modern life. "Everyone will have received one. We are delighted to have made this major breakthrough. We are giving control of the landline back to our customers and removing a major hassle and grief for millions of customers. "We have been at the forefront of equipping our customers to defend themselves against the flow of PPI and unwanted marketing calls that has become a flood in recent years. "Now we are able to announce that we are working to identify and tackle huge numbers of those calls in the network."

Mr Petter called on other telephone providers to join the fight against the "menace" of nuisance calls, adding: "They can help us to root out the malicious players they may be hosting on their own networks when we identify dodgy and suspicious calling behaviour." Which? executive director Richard Lloyd said: "People are fed up with being bombarded with unwanted calls so this is a step in the right direction for millions of BT customers. We now need to see more action 10 Number CBP 2016/0061, 7 March 2016

taken by the industry and Government to help reduce the stress and anxiety caused by nuisance calls."

An Ofcom spokesman said: "We've been working closely with communications providers to encourage them to implement innovative technical solutions to the problem of nuisance calls.

"We therefore welcome BT's plans to intercept nuisance calls on its network and reduce the harm caused to consumers."

Ofcom Latest customer complaint figures 15 December 2015

Ofcom today published data on the volume of consumer complaints it received against the major providers of telecoms and pay TV services. The latest report covers the three-month period from July to September 2015 (Q3), and includes complaints made about 13 providers of fixed line telephone, fixed line broadband, pay monthly mobile and pay TV services. Complaints figures are presented per 100,000 customers. Information plays an important role in ensuring communications markets work for consumers. By publishing complaints data, Ofcom aims to give people who are looking for a new provider useful information for comparing companies' performance. The quarterly reports also offer an incentive to providers to improve their performance. The total volume of telecoms and pay TV complaints made to Ofcom increased between Q2 and Q3 2015. Broadband and fixed line telephone saw the most notable increases in total volume of complaints. Complaints about pay monthly mobile and pay TV also increased, while the total complaint volume for mobile pay-as-you-go remained at similar levels to Q2 2015. Claudio Pollack, Director of Ofcom's Content and Consumer Group, said: "We expect providers to make customer service and complaints handling top priorities, so it's disappointing to see a rise in the number of complaints. "Consumers have a right to expect good service and will rightfully complain when that standard isn't met. Ofcom is continuing work to make switching easier and our complaints data allows consumers to make meaningful comparisons that can be useful when looking for a new provider."

Landline telephone EE and generated the highest volumes of landline complaints (34 per 100,000 customers and 33 per 100,000 customers respectively). The main complaint drivers for EE landline customers were concerns about faults, service and provision1 (27%); problems changing provider (26%); and complaints handling (19%). The main reasons for Plusnet's complaints were issues around faults, service and provision (30%); billing, pricing and charges (21%); and changing provider and complaints handling (both 19%). Plusnet's total complaints volume increased by 13 complaints per 100,000 between Q2 and Q3 2015. BT, Post Office HomePhone and TalkTalk also continued to generate Debate pack: BT service standards 11

landline complaint volumes above the industry average of 17 per 100,000 customers. 's complaints (6 per 100,000 customers) fell marginally below Sky's total complaints volume (7 per 100,000 customers), making it the best performing provider.

Landline telephone complaints per 100,000 customers

Broadband EE continued to generate the most complaints for fixed line broadband as a proportion of its customer base (45 per 100,000 customers) during the third quarter of the year. Problems relating to faults, service and provision (40%); billing, pricing and charges (20%); and complaints handling (19%) were the main drivers of complaints about EE broadband. Plusnet and BT saw significant increases in their broadband complaints volumes in Q3 2015. Complaints about Plusnet broadband increased to 37 per 100,000 customers (from 20 per 100,000 customers) and complaints about BT increased to 35 per 100,000 customers (from 22 per 100,000 customers). Both of these overall increases were driven by an increased number of complaints relating to faults, service and provision. The total complaints volume for TalkTalk increased to 33 per 100,000 customers and remained higher than the industry average (22 per 100,000 customers). Sky complaints (7 per 100,000 customers) were below the industry average but had increased slightly since Q2 2015 (5 per 100,000 customers). Virgin Media complaints (6 per 100,000 customers) were also below the industry average and had decreased slightly over the quarter (7 per 100,000 customers in Q2 2015).

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Fixed broadband complaints per 100,000 customers

Pay-monthly mobile remained the most complained about mobile provider, after complaint volumes increased to 20 complaints per 100,000 customers in the quarter (from 14 per 100,000 customers). The main drivers of Vodafone complaints were problems with billing, pricing and charges (37%); complaints handling (28%); and concerns around faults, service and provision (17%). EE was the only other mobile provider to generate more complaints (9 per 100,000 customers) than the industry average of 8 per 100,000 customers. Total complaints volume for Talk Mobile decreased significantly to 6 per 100,000 customers, compared with 12 per 100,000 in Q2 2015. Virgin Mobile, and Three UK all generated complaints volumes below the industry average. generated the lowest volume of complaints per 100,000 customers for the seventh consecutive quarter (1 complaint).

Pay-monthly mobile complaints per 100,000 customers

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Pay TV BT became the most complained about pay TV provider in Q3 2015. Complaints volume increased significantly to 25 per 100,000 customers, compared to 11 per 100,000 in Q2 2015. The main reasons for BT complaints were fault, service and provision issues (31%); complaints handling (25%); and issues relating to billing, pricing and charges (22%). The complaint volume for TalkTalk (14 per 100,000 customers) remained in line with the previous quarter. Virgin Media's total complaint volume remained unchanged at (5 per 100,000 customers), the same as the industry average. The only provider to generate fewer complaints than the industry average was Sky (2 per 100,000 customers), which remained the best- performing pay TV provider.

Pay TV complaints per 100,000 customers

Ofcom's work on complaints and quality of service On average, Ofcom receives slightly fewer than 300 telecoms complaints a day from consumers. These are analysed - alongside customer service satisfaction data and other sources of evidence - to help inform when and where additional consumer protection may be needed. Earlier this year, Ofcom extended an industry-wide monitoring and enforcement programme looking at providers’ compliance with requirements for complaints handling procedures. As part of this, Ofcom commissioned an independent study to look at whether providers are informing consumers with unresolved complaints of their right to go to Alternative Dispute Resolution (ADR). The research indicated that a number of providers were not sending appropriate letters as often as they should and Ofcom set clear expectations for improvement. Evidence gathered as part of this monitoring programme has also led to Ofcom opening separate investigations into the complaints handling procedures of Three UK, EE and Vodafone. Ofcom fined Three UK £250,000 in October 2014, and in July this year EE was fined £1,000,000 by Ofcom for failing to comply with rules on handling customers’ complaints. The investigation into Vodafone’s complaints handling procedures – the third to take place under this programme – is on-going.

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BT promises to bring back customer service to UK contact centres 18 September 2015

BT Consumer has promised to answer more than 80 per cent of its customers’ calls in the UK by the end of 2016 and plans to go further in years to come.

We have created more than 1,000 new UK jobs in preparation to meet this commitment, and plans to create hundreds of other customer call centre positions in the UK over the next year.

We’re in the midst of overhauling the service we offer to customers, including providing dedicated relationship managers to support customers with complex issues, offering more online support with our My BT customer service app and creating jobs in the UK so that customers can speak to UK based agents.

John Petter, chief executive of BT Consumer, said: “Our customers have told us that they would prefer to speak to a contact centre in the UK when they call us. “When we launched BT Mobile earlier this year we located customer service in the UK and our customers have valued that. We think doing this for our other products is one way in which we can boost the service that we offer customers. “This move will secure thousands of existing UK jobs and create new UK jobs. Our offshore partners have provided a good level of service for our customers and we will still have offshore partners to help us to deliver various campaigns and services. “However, we believe that now is the right time to commit more investment to the UK and that this is something that customers will appreciate.”

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4. PQs

British Telecom: Broadband Asked by: Davies, Dr James To ask the Secretary of State for Culture, Media and Sport, if he will take steps to encourage BT to improve (a) the information it provides online about broadband roll-out, (b) the accuracy of its communications to residents about when cabinets will come on stream and (c) information about support residents can access in the event of delays in roll-out.

Answering member: Mr Edward Vaizey | Department: Department for Culture, Media and Sport On 25 February Ofcom published their initial conclusions for the Strategic Review of Digital Communications including a range of measures to improve the quality of service delivered by the whole of the telecoms industry, including Openreach, BT’s access network division.

Ofcom will work with industry to improve providers’ coordination and communication to benefit consumers, including detailed information about engineer visits for installation and fault repairs. Ofcom also plans to introduce tougher minimum standards of customer service for Openreach with rigorous enforcement and fines for underperformance. In addition, the regulator plans to publish annual performance data on all operators and will look to introduce automatic compensation for consumers and small businesses when service levels fall below minimum standards.

BT recently launched a new website providing more detailed and accurate information to the public on broadband service in any given area - http://www.superfast-openreach.co.uk/where-and-when/ HC Deb 04 March 2016 | 29123

British Telecom Asked by: Duncan, Sir Alan To ask the Secretary of State for Culture, Media and Sport, what obligations Openreach and BT have under contracts with the Government to provide prior warning to residents of planned maintenance or improvement work to junction boxes and other infrastructure that involves the temporary disconnection of services.

Answering member: Mr Edward Vaizey | Department: Department for Culture, Media and Sport The same regulatory and communication code conditions apply to Openreach in BDUK contracted areas as would apply to their commercial deployment areas.

The contracts between BT and government relating to broadband are for the provision of the design and build of infrastructure. Once this infrastructure is in place, it forms part of BT’s network and maintenance and improvement works will be carried out by Openreach in the same way as on the rest of the network. Although there is no obligation to 16 Number CBP 2016/0061, 7 March 2016

inform residents of any planned upgrades or essential maintenance, these activities are scheduled to be carried out when usage is at its lowest, in order to minimise disruption. HC Deb 26 February 2016 | PQ 26494

Business of the House Asked by: Angela Smith BT’s handling of broadband infrastructure leaves a lot to be desired, and businesses in my constituency constantly complain about the service they receive. Even my constituency office has a problem. We still have no broadband and no phone connection nine weeks after moving into a brand-new building. Given BT’s constant failure to deliver in a timely fashion the broadband infrastructure this country so badly needs, may we have a debate on whether it is time to consider separating the infrastructure element and retail element of that badly failing inefficient company?

Answered by: Chris Grayling: The hon. Lady makes her point eloquently. If she wants to raise the specific concern with the Department and ask it to put pressure on BT about that, and if she writes to me with the details, I will make sure that that receives attention. I also will make sure that the points she makes are passed on to the Business Department. HC Deb 17 December 2015 | Vol 603 c1714

Housing: Telephone Services Asked by: Luff, Sir Peter To ask the Secretary of State for Culture, Media and Sport, what assessment he has made of the time taken by BT Openreach to provide for the connection of new housing developments to telephone services.

Answering member: Mr Edward Vaizey | Department: Department for Culture Media and Sport The lead times for connecting new housing developments will vary according to their location, the services being provided and the engineering difficulties that the company faces. I am aware that there have been delays in connecting some new developments and that Openreach has been recruiting additional staff to help address this problem. The Government recently published its Utilities Guide setting out performance standards for new utility connections. The guide includes for the first time performance standards for telecoms and broadband connections to new builds. This will allow the performance of communications infrastructure providers to be monitored. We will also be exploring with housebuilders and communications infrastructure providers the scope for making further improvements to connection lead times. HC Deb 05 January 2015 | PQ 219008

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Business of the House Asked by: Alan Reid Following a storm more than a month ago, BT has still not restored a landline service to many of my constituents. services are also affected—for example, it took Vodafone 20 days to repair a fault in December, and a large part of Argyll has been without a Vodafone mobile service since last Thursday. Such delays are unacceptable. May we have an urgent statement from the Department for Culture, Media and Sport on what can be done to make those companies carry out repairs more quickly in future?

Answered by: William Hague: As I recall, this is the second time my hon. Friend has found it necessary to raise that issue, which is clearly a serious problem in his constituency, and I hope that BT and all those responsible will take full note of his raising the matter in the House. We have just had questions to DCMS Ministers, and I will alert them to the problem he raises. HC Deb 15 January 2015 | Vol 590 c1013

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5. Useful links and further reading

Ofcom Quality of Customer Service report January 2016 http://stakeholders.ofcom.org.uk/binaries/research/quality-of-customer- service-annual-reports/Quality_of_Customer_Service_report_2015.pdf

Jigsaw Research for Ofcom: Quality of service in telecoms: Residential consumer and SME experiences of quality of service in fixed line, broadband and mobile telecoms February 2016 http://stakeholders.ofcom.org.uk/binaries/telecoms/policy/digital- comms-review/Jigsaw_quality_of_service_in_telecoms.pdf

Ofcom Making communications work for everyone: Initial conclusions from the Strategic Review of Digital Communications February 2016 http://stakeholders.ofcom.org.uk/binaries/telecoms/policy/digital- comms-review/DCR-statement.pdf

BT code of practice for residential customers and small businesses http://btplc.com/Thegroup/RegulatoryandPublicaffairs/Codeofpractice/C onsumercodeofpractice/BTResidentialCodeofPractice_JUNE_2015.pdf

BT Openreach Charter 22 September 2015 https://www.btplc.com/Sharesandperformance/Presentations/Presentatio ns/keycompanyannouncements/downloads/OpenreachCharter.pdf

House of Commons Culture, Media and Sport Select Committee current inquiry Establishing world-class connectivity throughout the UK http://www.parliament.uk/business/committees/committees-a- z/commons-select/culture-media-and-sport- committee/inquiries/parliament-2015/establishing-world-class- connectivity-throughout-the-uk-15-16/

Commons Library Briefing Paper: Consumer Rights Act 2015 http://researchbriefings.intranet.parliament.uk/ResearchBriefing/Summar y/SN06588

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