Denham Sadler
December 19, 2017

ACCC targets NBN experience

Broadband

ACCC targets NBN experience

Rod Sims: Concern over current NBN wholesale service standards

Australia’s consumer watchdog could take regulatory action as early as mid-next year to improve customer experiences with the NBN.

The Australian Competition and Consumer Commission (ACCC) launched an inquiry into the NBN wholesale service standards at the start of November, in the wake of record numbers of complaints regarding the service and its rollout across the country.

The competition regulator has now released a discussion paper for the inquiry, seeking public input on the service level that NBN Co has committed to in its wholesale contracts surrounding connections, fixing faults and appointments.

The ACCC is also actively considering whether it needs to use its regulatory powers to improve NBN service, and could move to make interim regulated terms in the first half of next year. It is also considering more permanent regulatory action to ensure whole service standards are met in the long term.

An interim measure would be introduced to address any possible “immediate, high impact issues”, including “ensuring appropriate incentives are in place for NBN Co to meet its current service standards, potentially through revised compensation agreements”, the discussion paper stated.

The ACCC is also looking to introduce a binding rule of conduct and final access determination in the longer-term. The watchdog has the powers to set the regulated terms and conditions of access to NBN services to “promote the long-term interests of end users”, the paper said.

The wholesale service standards are a core element of the commercial arrangements between NBN Co and the retail service providers impacting customer experiences, and include performance objectives and operational targets, along with requirements to take corrective action if service standard levels are not made and compensation frameworks for customers.

ACCC chair Rod Sims said the watchdog had already received a number of complaints surrounding the roll out of the NBN.

“NBN is now in its peak rollout phase and the ACCC is concerned that complaints about connecting to services, including missed appointments and having faults repaired, will continue to grow unless improvements are made now,” Mr Sims said.

“This inquiry will consider whether there are appropriate incentives for NBN Co to remedy service failures. We will also look at the compensation made available by NBN Co to ISPs, which are responsible for providing redress directly to consumers when things go wrong.

“The ACCC has heard industry concern from ISPs that the service standards aren’t adequate to ensure customers have a good experience connecting to and having faults repaired for NBN services.”

The discussion paper outlined the scope of the inquiry, which will look at the:

  • Scope of wholesale service standards
  • Appropriateness of incentives for NBN Co to remedy service failures
  • Adequacy of compensation available to NBN customers
  • Wholesale service standards in the context of the supply chain
  • Levels of transparency around service outcomes
  • Other wholesale activities that influence consumer experience.

The inquiry was launched on the back of increasing complaints relating to the NBN. The Telecommunications Industry Ombudsman’s annual report this year showed that complaints relating to services delivered on the NBN skyrocketed by nearly 160 per cent to more than 27,000. Of these, more than 16,000 centered on fault complaints, and more than 11,000 were related to delays in connecting to the NBN.

NBN Co recently finalised a new Wholesale Broadband Agreement (WBA) 3 with retail service providers, including commitments to service performance and for activations and fault restorations.

In the discussion paper, the ACCC said it had already received a number of concerns relating to the WBA 3, and this will be scrutinised as part of the inquiry. It said concerns have been surrounding whether the service levels and performance objectives are adequate to ensure good customer service, and if the compensation on offer when the NBN fails to meet levels are sufficient to incentivise the company to reach them.

“As a result, some RSPs are either trying to avoid paying compensation to customers or are making compensation payments but without themselves being compensated. They may also be incurring costs to mitigate the impacts on consumers,” the paper said.

The inquiry will also be investigating whether there is a power imbalance between NBN Co and the RSPs when bargaining. 

“We are interested to understand from all stakeholders whether there is a significant degree of inequality in bargaining power between NBN Co and access seekers and if so, the degree to which this has impacted commercial negotiations, particularly in relation to service standards set out in WBA 3,” the paper stated.

The ACCC will report back on the inquiry by the end of next year.

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