In September 2021 Ofcom announced its intention to implement the One Touch Switch ("OTS") process to help broadband, voice and landline customers change provider. With the deadline for compliance fast approaching and participation a mandatory regulatory requirement, in this piece we consider the steps providers should be taking to comply with Condition C7 of Ofcom's General Conditions of Entitlement ("switching condition") and the risk of non-compliance.
Background
OTS became a requirement for all residential fixed broadband and voice providers on 3 April 2023.
Due to the challenges caused by the technical complexities to coordinate multiple providers and backend systems to ensure seamless transition between providers, regulatory requirements and national players' resistance to implementation, the deadline was delayed to 14 March 2024 and then to 12 September 2024.
Given the growth in the number of providers offering alternative full fibre gigabit broadband networks ("Altnets") with the support of Project Gigabit subsidy and voucher schemes, OTS is an opportunity for those Altnets as customers can switch more easily from major ISPs via a more streamlined process, ultimately driving more competitive pricing and advantages for the customer.
What is One Touch Switching?
OTS removes the burden on the customer to notify their current provider that they want to transfer, by implementing standardised processes and obligations on providers to execute the switch quickly and efficiently.
The One Touch Switching Company ("TOTSCo"), an industry led not-for-profit organisation created to deliver OTS processes, is responsible for creating and operating the TOTSCo Hub, a specially designed messaging platform via which customer details will be exchanged between the customer's new supplier ("gaining provider") and old supplier ("losing provider") and is key to implementing OTS, including to meet the timescales for acknowledging, responding and completing the process.
The switching condition also refers to compliance in accordance with "any applicable industry agreed processes". These processes are set out in The One Touch Switch Industry Process which providers must adhere to during the OTS process.
What are your obligations?
Ofcom's General Conditions C7.18 to C7.27 set out a process by which providers will make available to residential customers a free of charge switching process ensuring that customers will not be required to contact, obtain consent from, or take any other steps required by a losing provider.
The gaining provider is responsible for submitting a request to the losing provider to make certain information available to the switching customer. Upon request from the gaining provider, the losing provider must promptly (within 60 seconds) provide the required information to the switching customer including confirmation of the identity of the gaining provider and an explanation of steps the customer will need to take if transferring services forming part of a bundle. To facilitate this request for information and subsequent response, providers will use the TOTSCo Hub. These processes will require providers to implement internal processes and technical changes to ensure that the data transfer is automated.
Providers should also be aware that compensation obligations apply to the OTS process. If providers fail to comply with the OTS obligations, then they will be required to reasonably compensate switching customers (Conditions C7.47 to C7.49). This means, for example, that compensation would be payable to a switching customer if that customer had to contact the losing provider to action a switch (which may be the case for some providers currently without use of the TOTSCo Hub).
What should providers be doing to be OTS ready by September 2024?
- Confirm that you are subject to OTS. OTS applies to all providers of fixed broadband and voice services to residential customers. Wholesale only providers will not be directly affected, but they will want to ensure that their retail providers are ready in time. If you are unsure whether OTS applies to you, then take legal advice.
- Sign up with TOTSCo and engage with the OTS process. Regardless of your size, you should sign up with TOTSCo (which involves entering into a user agreement) and begin engaging with the OTS process as soon as possible. The more time you have to carry out testing of the TOTSCo Hub, the better as this will allow you to understand the potential challenges in the transition, comprehend the technical specification documents, and roll out any amendments to your internal business processes. The TOTSCo website has various resources including a checklist of tasks for providers to think about to prepare. You will also want to understand your obligations in the TOTSCo user agreement. You may wish to get legal advice on that.
- Carry out diligence on your existing systems and procedures. It will be important to evaluate whether your existing systems, processes and procedures are capable of interoperating with the TOTSCo Hub directly or if an indirect connection through a managed access provider is required to comply with the OTS process. You will also need to consider whether you need to procure any additional technical systems and/or additional resource to perform any preparatory steps needed before the transition.
- Review your privacy notice. Privacy notices should be reviewed and updated to ensure that customers are fully aware of how their personal data is being used, and why, with the introduction of OTS. For example, you should consider the basis of any additional processing of personal data arising from your use of the TOTSCo hub and from the sharing of customer information between providers. This may vary depending on whether you are the gaining provider (e.g. performance of the contract) or losing provider (e.g. legitimate interests).
- Review customer terms. A review of your current customer journey and associated terms and conditions should be conducted and, if necessary, updated to reflect implementation of OTS and notified to customers by the go-live date, this may include updating the compensation available and explaining, clearly and in plain English, the compensation claim process.
- Update customer information documentation. All customer literature (for example, pre-contract information and information available on your website) should be reviewed to ensure that they accurately document what the introduction of the OTS process means for residential customers (including the applicable changes to your terms and conditions).
- Consider implications for business customers. The switching condition also applies to business customers, which will sit alongside the OTS for residential customers, to allow for multi-part switches. Documentation is ready for industry consultation and will be the focus once OTS launches in September. Providers to business customers will also need to consider the implications, obligations and processes to comply with the switching condition for those customers.
Non-compliance risk?
Notwithstanding the delayed go live date for OTS and the fact providers are technically in breach of the switching condition, Ofcom is not actively pursuing providers with enforcement action. However, Ofcom has not fettered its power to do so.
Ofcom has stated that it will consider whether it is appropriate to open investigations into individual providers "once OTS has launched". Failure to deploy OTS by 12 September 2024, could result in Ofcom taking enforcement action for non-compliance. As a future delay is not anticipated by TOTSCo and the risk of regulatory enforcement for non-compliance (such as imposing penalties or fines, issuing warning notices and revoking licences) will be significantly higher post September 2024, providers should be taking all steps necessary to understand and implement measures to meet the OTS requirements sooner rather than later.
In conclusion, the OTS deadline is fast approaching, so providers are strongly encouraged to evaluate, engage and implement processes as soon as possible ahead of 12 September 2024. If you have any questions or would like to delve deeper into any of these insights, please don't hesitate to get in touch.
