ACCAN says 5G is an indirect substitute for fixed line NBN

The Australian Communications Consumer Action Network has said genuine competition to NBN only exists on the margins.
Written by Chris Duckett, Contributor

The Australian Communications Consumer Action Network (ACCAN) has said that the National Broadband Network does not face genuine competition, and where it does, is only the margins.

"Predominantly in specific use cases and where households live in a 5G footprint and are able to afford those more expensive services. However, for the majority of households, NBN is the only wholesale provider of broadband to appropriately support their telecommunication needs," the consumer advocacy group said in a submission on NBN's Special Access Undertaking consultation.

"Whilst we do not know the cross elasticity of demand between fixed line broadband and wireless alternatives, we would assume that the two goods are indirect substitutes."

The group said having a third of households not connected to the NBN did not necessarily indicate that competitive market between fixed and mobile connectivity.

"Given the disproportionately high number of mobile-only households amongst households in lower socio-economic settings, there will be a significant number of households amongst the 4 million not connected to the NBN who do so out of necessity, and not choice," it said.

On the options put forward by NBN, ACCAN said the halfway house model that removes CVC on plans of 100Mbps and quicker was the least worst choice, followed by the reworking of its current pricing structure, and finally the flat priced model that removes CVC altogether.

ACCAN pointed out it could use a May 22 proposal to construct cheaper wholesale prices than the melded plan, was concerned about why the flat fee model increased prices on 81% of NBN connections, and suggested the reworked plan did not have overage charges reflective of NBN's cost of provisioning capacity.

Particularly with parts of New South Wales going through their sixth week of lockdown, ACCAN called on NBN to introduce its low-income product before current pricing discussion was completed.

"NBN Co has been consulting on a low-income product for vulnerable households since 2019, and we were led to believe that this much needed product would finally come to market this year. We're still waiting," ACCAN CEO Teresa Corbin said.

"People need connectivity now; they can't afford to wait for months and months until the regulatory process is over."

ACCAN said in its submission, the entry-level plan should be the 25Mbps plan, not the current 12Mbps.

"The reason for this applying over the duration of the SAU, which lasts until 2040, is that the 12/1Mbps service will become increasingly redundant as households require higher speeds to participate in the digital economy," it wrote.

"Already the 12/1Mbps service does not suit the needs of many households."

The group also called for increasing the rebate paid by NBN for each subsequent month a fixed wireless service remains underperforming, and questioned the threshold used by NBN to deem a service as having a service fault.

"ACCAN understands that this threshold currently requires a service to experience 10 or more dropouts within a 24-hour period," it said.

"ACCAN considers that this service fault threshold is too high to ensure a positive experience of the network. In addition, it is unclear to ACCAN what remedies are available to consumers experiencing below 10 dropouts per 24-hour period, who may be contending with regular service drop-outs and interruptions."

In its most recent monthly progress report, NBN reported its right first-time installation metric had recovered to 78% after falling to a low of 74% in May. Similarly, the meeting agreed fault restoration times metric bounced back to 74% after dropping to 70% the month prior.

Both metrics had previously been in the high 80% or 90% range.

"This metric has been impacted by some unexpected challenges following the recent implementation of a new appointment scheduling system," the company said in a note attached to the report.

"NBN Co is working closely with phone and internet providers and delivery partners to have these issues resolved as soon as possible."

The company recently spelled out how its ServiceMax Go (SMAX-Go) app for technicians interacts with its ServiceNow, ServiceMax, and Oracle back-ends, as well as the cost of some of the system.

"The cost to develop the ServiceMax (including SMAX-Go app) component of the system architecture to support the new field contracts under Unify was AU$13.3 million total, over FY19, FY20, and FY21," NBN said.

"SMAX-Go went live in Victoria and South Australia on 14 April 2021, followed by New South Wales, Tasmania, and Australian Capital Territory on 28 April 2021. The app is yet to go live in Western Australia, Northern Territory, and Queensland."

During a hearing in May, NBN said the problems technicians were experiencing when the app launched in NSW was because the system was overloaded.

"What happened, when literally it was rolled out in New South Wales, the platform went down and we then had, due to literally the doubling of our workforce on the system, we then add the issues around the functionality where it wasn't syncing properly, so therefore it caused a poor experience," NBN COO Kathrine Dyer said.

Dyer said the software was hit by a trio of factors: A two-day platform outage that hit NBN and technicians; it wasn't syncing; and it was updating its functionality.

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