Case Studies - Faults (network & hardware issues)

TDR Case Note T011060 (2012)


Faults - delay in service restoration


The Customer subscribed to a residential telephone and internet broadband service package with the Scheme Member Provider (Provider). The Customer lost the broadband service to his home on 5 December 2011. During his first call to the Provider on the morning of 6 December, he was advised that there was an 'unknown' fault. A later call from the Provider confirmed the fault may have resulted from a network-upgrade on 5 December. The Provider said that it would dispatch a technician. Because Internet connectivity played a cruical part in his home business, the Customer was forced to relocate to his father's office to retrieve and send emails. The broadband service at his home was down until 6.30pm and he was informed by the Provider that there was no fault found, and that his router equipment could be the cause. The Customer requested a technician to investigate.

The upgraded system was restored to the original configuration, and the Customer's broadband service was finally re-established at 8.45pm on 6 December. The Customer complained that the Provider performed a supposed 'upgrade' without informing him, and that the upgrade was neither tested nor suitable for his location. The Provider's technician accepted responsibility and stated that it should not have happened. The Customer complained to the Provider on 15 December. The Customer requested reimbursement of $4,000.00 for the inconvenience suffered for the one day, wasted time and effort, performance issues, and lack of understanding amongst the Provider's staff.

The Provider responded that it would not ordinarily be aware of a fault unless advised by the affected Customer. In addition, upgrades occur hundreds of times a week throughout the Provider's network, so it is not obliged to notify Customers directly, other than Customers in place where outages were expected. The Provider advised that it could not guarantee a fault-free continous service and in this case, the service was restored within 12 hours of the fault being reported. Acknowledging that the outage caused some inconvenience to the Customer, the Provider had given a credit equal to one month of the total home landline broadband package ($95.00) but confirmed that it was unable to compensate residential Customers for loss of business, real or perceived.

Adjudicator's decision

The adjudicator found that, in respect of the residential telephone and Internet broadband plan with the Provider, the Customer is bound by the Provider's Residential Terms and Conditions. Under those Terms and Conditions, the Provider was required to do its best to fix all faults on the network outside the Customer's home and in any equipment the Customer rents from it at no charge. However, the Provider does not guarantee "fault-free" services.  The Terms and Conditions also state that if the Customer is still without a service because of a fault more than 24 hours after reporting it, the Customer can choose either a credit to their account of "one month's worth of residential line rental or $50 worth of phone cards". According to the file material, the Adjudicator considered that the Provider had repaired the fault within the 24 hour timeframe, and the Customer was therefore not entitled to monetary compensation for the outage. The Provider, however, had credited the Customer's account with $95.00 as a goodwill gesture, being one month of the total home landline broadband service.

In addition, the Adjudicator found that the Provider does not have to compensate residential Customers for loss of business. With reference to section 28 of the Consumer Guarantees Act (CGA), which requires the Provider to guarantee 'reasonable care and skill', the Adjudicator considered that the Provider did act with reasonable care and skill, and within a reasonable timeframe, to remedy the fault following notification by the Customer. The Adjudicator considered that broadband is a comparatively new and developing network service, and there are likely to be some outages or failures or service for varying degrees of time. The outage occured due to the incompatibility of the upgrade. The Adjudicator therefore considered that the Provider was not liable to compensate the Customer for any business loss caused by this incompatibility.

With regard to the Customer's complaint about not being informed of the upgrade, the Adjudicator found that the Provider's Terms and Conditions do not refer to Customers being notified of upgrades. Upgrading is a feature of telecommunications services intended to improve service to Customers, including broadband services that are normally influenced by a range of connectivity factors. The Adjudicator considered that the matter was not reasonably foreseeable and the fault was remedied within a reasonable period of time.

Final outcome

The Adjudicator dismissed the Customer's complaint and concluded that there was no breach of contract law, the CGA, or the Residential Terms and Conditions on the part of the Provider. There were therefore no remedies awarded.