OfCom’s outgoing CEO Sharon White has made it a priority to improve the way broadband, phone and pay TV providers treat their customers – and she doesn’t seem minded to go quietly.
The soon to be CEO of John Lewis has unveiled what the watchdog describes as its “fairness framework”.
For those looking at that slogan and understandably thinking “ugh”, there is meat on the buzzwords’ bones. The framework sets out the type of behaviour the regulator regards as “unfair” and thus liable to provoke disciplinary action.
We’ll tell you what’s true. You can form your own view.
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It has also, commendably, put its finger on why the market so frequently fails its customers: it’s a godawful confusing mess.
It is extraordinarily difficult to work out whether you’d get a better deal by switching, and given that everyone’s probably heard a horror story from those that have taken the plunge if they haven’t actually experienced one themselves, it’s no wonder so many feel it’s a case of better the devil you know.
1/10 No deal, no tariffs
The government has announced that it would slash almost all tariffs in the event of a no-deal Brexit. Notable exceptions include cars and meat, which will see tariffs in place to protect British farmers
Getty
2/10 Fingerprint payment
NatWest is trialling a new bank card that will allow people to touch their hand to the card when paying rather than typing in a PIN number. The card will work by recognising the user’s fingerprint
NatWest/PA Wire
3/10 Mahabis bust
High-end slipper retailer Mahabis has gone into administration. 2 Jan 2019
Mahabis
4/10 Costa Cola
Coca-Cola has paid £3.9bn for Costa Coffee. A cafe chain is a new venture for the global soft drinks giant
PA
5/10 RIP Payday Loans
A funeral procession for payday loans was held in London on September 2. The future of pay day lenders is in doubt after Wonga, Britain’s biggest, went into administration on August 30
PA
6/10 Musk irks investors and directors
Elon Musk has concluded that Tesla will remain public. Investors and company directors were angry at Musk for tweeting unexpectedly that he was considering taking Tesla private and share prices had taken a tumble in the following weeks
Getty
7/10 Jaguar warning
Iconic British car maker Jaguar Land Rover warned on July 5, 2018 that a “bad” Brexit deal could jeopardise planned investment of more than $100 billion, upping corporate pressure as the government heads into crucial talks
AFP/Getty
8/10 Spotif-IPO
Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn’t issuing shares, but rather, shares held by Spotify’s private investors will be sold
AFP/Getty
9/10 French blue passports
The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July.
The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process.
10/10 Beast from the east economic impact
The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.
1/10 No deal, no tariffs
The government has announced that it would slash almost all tariffs in the event of a no-deal Brexit. Notable exceptions include cars and meat, which will see tariffs in place to protect British farmers
Getty
2/10 Fingerprint payment
NatWest is trialling a new bank card that will allow people to touch their hand to the card when paying rather than typing in a PIN number. The card will work by recognising the user’s fingerprint
NatWest/PA Wire
3/10 Mahabis bust
High-end slipper retailer Mahabis has gone into administration. 2 Jan 2019
Mahabis
4/10 Costa Cola
Coca-Cola has paid £3.9bn for Costa Coffee. A cafe chain is a new venture for the global soft drinks giant
PA
5/10 RIP Payday Loans
A funeral procession for payday loans was held in London on September 2. The future of pay day lenders is in doubt after Wonga, Britain’s biggest, went into administration on August 30
PA
6/10 Musk irks investors and directors
Elon Musk has concluded that Tesla will remain public. Investors and company directors were angry at Musk for tweeting unexpectedly that he was considering taking Tesla private and share prices had taken a tumble in the following weeks
Getty
7/10 Jaguar warning
Iconic British car maker Jaguar Land Rover warned on July 5, 2018 that a “bad” Brexit deal could jeopardise planned investment of more than $100 billion, upping corporate pressure as the government heads into crucial talks
AFP/Getty
8/10 Spotif-IPO
Spotify traded publically for the first time on the New York Stock Exchange on Tuesday. However, the company isn’t issuing shares, but rather, shares held by Spotify’s private investors will be sold
AFP/Getty
9/10 French blue passports
The deadline to award a contract to make blue British passports after Brexit has been extended by two weeks following a request by bidder De La Rue. The move comes after anger at the announcement British passports would be produced by Franco-Dutch firm Gemalto when De La Rue’s contract ends in July.
The British firm said Gemalto was chosen only because it undercut the competition, but the UK company also admitted that it was not the cheapest choice in the tendering process.
10/10 Beast from the east economic impact
The Beast from the East wiped £4m off of Flybe’s revenues due to flight cancellations, airport closures and delays, according to the budget airline’s estimates. Flybe said it cancelled 994 flights in the three months to 31 March, compared to 372 in the same period last year.
Interestingly, it sometimes is. A minority can benefit through, for example, being on competitive legacy deals. But, as with many other utilities or utility type industries (energy, banking, insurance) a hefty “loyalty penalty” is more often imposed on those who stay put.
The regulator’s means of addressing that unhappy situation is to require that its charges contact their customers when their initial contracts are up, and every year after that, to explain their options and outline their best available deal.
It has potential to put quite a bit of money back in their pockets but there is a risk. It could serve to discourage switching given the hassle involved in the process: if your provider offers you its best and it’s only a bit more expensive than its rivals, a lot of people will probably feel it’s worth paying the extra to avoid the hassle.
If you decrease the need to compete as a result of that, prices could easily start to rise. It’s what’s called the law of unintended consequences.
Still, the market is suffering from a notable lack of effective competition at the moment. If it were otherwise, there wouldn’t be such a pressing need for the regulator to intervene as it is doing.
White insists that OfCom intends to translate the high-sounding principles and promises she has made the industry agree to into better outcomes on the ground.
Its own survey data shows that it has a long way to go. Figures from April show just 83 per cent of broadband customers are satisfied with the service they’re getting. It looks like a big number but, as I’ve written previously, try turning it around. Close to one in five of us are dissatisfied, which translates into millions of people.
John Lewis, where Ms White is going, would be out of business in a heartbeat if it turned in numbers like that.
The fairness framework needs to get this industry a lot closer to the much vaunted performance standards of her new employer.
If the framework does that, it will have proven itself to be a worthwhile exercise. But Ms White’s successor may need to don a pair of knuckle dusters along the way.
