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The Internet Services Providers' Association (ISPA) has questioned Ofcom's proposed automatic compensation scheme for broadband customers.

Earlier this year, Ofcom proposed new regulations which would require telecoms firms to automatically pay out to customers if they experience missed deadlines, slow repairs, or if an appointment is not kept.

The regulator believes this could result in as much as £182 million in extra compensation being paid out annually, with households set to get £30 if they wait in for an engineer, only for them to fail to arrive or for the appointment to be cancelled at short notice.

However, ISPA believes the suggested levels of compensation are "out of proportion" compared to the "generally low prices" that consumers currently pay.

Andrew Glover, Chair of ISPA, warned this could therefore divert resources away from rolling out faster connections throughout the UK.

"Internet service providers fully support the principle of automatic compensation, but we do not believe that Ofcom’s suggested approach fully recognises the dynamics and complexities of the UK broadband market," he commented.

Mr Glover said the alternative voluntary approach that has been proposed by the industry would still give consumers an automatic right to compensation.

However, he stressed the level of compensation would be more in line with the overall cost of broadband services, while it could also be implemented more quickly.

"A key aim of any automatic compensation policy should ultimately be to minimise disruption to consumer’s services," Mr Glover continued.

This, he stated, means the right balance needs to be struck between helping providers address discrepancies in the market and letting them keep investing in their networks and pricing products competitively.

ISPA was speaking after Citizens Advice this week urged Ofcom to stand its ground and introduce a mandatory automatic compensation scheme for broadband customers.

The organisation is concerned that the voluntary option put forward by the broadband industry would be worse for customers than the original proposal, as the total size of the payouts would be at least £52 million - or 32 per cent - lower.

However, ISPA said Citizen Advice’s research is based on figures that are no longer up to date.

"The industry is currently engaging with Ofcom to determine the best level of compensation," Mr Glover added.

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