MARK GREGORY
May 30, 2017

Complaint file grows at NBN Co

TelcoLand

Complaint file grows at NBN Co

Malcolm Turnbull: Is now hearing more about NBN Co's growing customer complaint problems

Criticism of NBN Co’s failure to address consumer complaints is steadily increasing. Rather than address the complaints, NBN CEO Bill Morrow and his growing team of media handlers and spin merchants are working overtime to bury the extent of the problem.

Every aspect of what NBN Co has been tasked to do is coming under scrutiny and increasing criticism.

The added complexity, cost blowouts and business model chaos caused by the shift to the multi-technology mix cannot be hidden for ever, and day by day the extent of the mess at NBN Co is becoming more apparent.

Nearly seven and a half years into the NBN rollout, the NBN Co is still unable to identify where the NBN should be installed and what technology is to be used. As much as 20 to 30 per cent of the copper and HFC networks are not fit for purpose and NBN Co is continuing to blunder ahead.

NBN Co recently claimed that new discrepancies found in the Geocoded National Address File (G-NAF) database are partially to blame for the constant upheaval, but after seven-and-a-half years from the commencement of the rollout, this is nothing but a lame excuse for ongoing mismanagement.

In the original NBN legislation there is a requirement that 18 months after a region becomes ready for service, the legacy copper network is to be turned off and decommissioned.

In a tricky and quite remarkable sleight of hand at the end of last year, the Government issued a regulation that permits NBN Co to dodge this legislated requirement by effectively shifting premises into a special “service continuity region” where the operation of the legacy copper network will be extended for six-months.

This unchallenged boondoggle effectively means that the legislation is not being adhered to and the legacy copper network is continuing to operate in many areas, at great cost, for homes that have been designated Service Class 0.

It is time that the Australian Competition and Consumer Commission (ACCC) tested this regulation in court as it is not in the best interest of end users and has been introduced to sidestep legislation, legislation that the Government cannot change due to a Senate that is hostile to this Government’s second rate NBN policy.

The Government estimates that about 10 per cent of homes in any region will be put into the too hard basket, designated Service Class 0 and left for two years or more before action is taken to connect these premises to the NBN. Many of these premises are not likely to be connected to the NBN before 2020.

The number of premises in the too hard basket now stands at over 145,000 and this number appears to be growing daily as NBN Co strives to “complete” the NBN by 2020.

The problem with NBN Co’s handling of consumer complaints is bigger than you might imagine. To gain an understanding of how bad NBN Co really is, let us consider what is happening in New Zealand where Chorus and three other companies are rolling out Fibre to the Premises (FTTP) which is known in New Zealand as Ultra-Fast Broadband (UFB).

At the end of the 2016 financial year, NBN Co had about 1,650,000 active connections and New Zealand’s Chorus had about 1,230,000 active connections.

Whilst the number of active connections for NBN Co and Chorus is in the same order of magnitude now, it is expected that this number will diverge quickly over coming months as there are about 12 million premises in Australia and about 3 million in New Zealand.

Currently, NBN Co is connecting about 130,000 premises per month to the NBN using the multi technology mix. Chorus is connecting about 13,500 per month to the UFB.

By the end of the rollouts, Australia could have about 50 per cent connected to the NBN using the obsolete Fibre to the Node (FTTN) and New Zealand will have about 85 per cent connected using UFB.

Consumers experiencing a telecommunications related problem are expected to contact their retail service provider to have the matter dealt with and if they feel that the problem has not been resolved can complain to the Telecommunications Industry Ombudsman (TIO) (Australia) or to Telecommunications Dispute Resolution (TDR) (New Zealand).

At the end of 2016 financial year, there were about 8.8 NBN related complaints made in Australia to the TIO per thousand connections. In New Zealand, there were about 6.8 Chorus related complaints made to the TDR per ten thousand connections.

It should be noted that there were two assumptions made when these figures were derived to reflect the different approaches used by the TIO and TDR to capture and report complaints.

NBN Co’s response to the growing number of consumer complaints has been to blame retail service providers, its construction partners, and any other organisation that it can for the growing malaise.

The ACCC recently intervened, has taken steps to begin monitoring broadband connection speeds and to force retail service providers that have overcharged consumers for NBN connection speeds that cannot be achieved to offer refunds to affected consumers.

By getting involved one consequence of the ACCC’s actions is to further highlight NBN Co’s business model disaster, and the obsolete FTTN technology preferred by the Prime Minister Malcolm Turnbull at the 2013 Federal election.

In New Zealand during 2016, Chorus decided to address consumer complaints by making sweeping changes to the way it does business and how it manages the UFB rollout.

Chorus charges retail service providers a set amount per month for consumer connections, which means that Chorus customers can get 100/20 Mbps connections with unlimited usage plans at reasonable prices that are far lower than what is available here.

Chorus is managing congestion by providing sufficient network capacity to ensure that consumers receive more than 90 per cent of their UFB connection speed all day, whereas here, during peak times Australian consumers are reporting that they’re receiving as little as 5 per cent of their NBN connection speed.

A major problem with the NBN rollout is how the infrastructure is being built. NBN Co has outsourced the construction to industry partners, thereby introducing several layers of extra management sitting over the construction teams, many of which are sub-contractors.

What this means is that there are often scheduling conflicts between NBN Co, the construction partner and the construction team sub-contractors.

NBN Co has also taken steps to push aspects of the consumer premises setup onto retail service providers and recently asked the ACCC to agree to shifting the network boundary back from premises to the nodes thereby shifting construction related problems onto consumers.

The construction process being utilised by NBN Co is nothing short of a quagmire and it is little wonder there are so many complaints to the TIO and the ACCC. The ACCC should not be an active and willing participant that aids NBN Co’s unconscionable plans.

Reports of five or more visits by NBN Co, the construction partners and construction teams to premises before the NBN is connected are common-place today and claims of duplication and money-wasting have now become a regular occurrence in the media.

Chorus identified the need to improve how the UFB construction process occurs and has instituted a two-stage rollout process that it manages directly without the “aid” of construction partners.

The first stage is to rollout the pits, ducts and other infrastructure needed for the UFB and the second stage is to send a team out to put fibre into the ducts and to connect premises to the network.

The rollout team then helps consumers connect household computers and other devices to the network before they leave the premises.

When this is complete and the consumer is fully connected over the UFB network, Chorus hands over the premises management to the consumer selected retail service provider.

By taking control of the UFB rollout Chorus has reduced consumer concern about the construction process and outcomes. This has been a major achievement by Chorus.

NBN Co’s Board and senior management team are directly responsible for the growing mess here and it is time that they stopped blaming others, changed direction and worked to improve consumer satisfaction.

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