ACCC flags shifting NBN rebates for late connections and faults to daily penalty

The Australian Competition and Consumer Commission (ACCC) has made a draft decision to shift the NBN rebate system that was introduced last year from a one-off payment to a daily penalty, in addition to boosting the amount of the rebate.

Under the draft decision out for comment until November 1, the size of the rebate for missed appointments by the NBN would increase from AU$25 to AU$75, the rebate charged for late connections and fault repairs would move to accrue daily, and a AU$20 rebate would be introduced for users of fixed wireless connected to a congested cell.

"It's unusual for a monopoly telecommunications network operator of NBN Co's scale not to be subject to regulated service standards," ACCC chair Rod Sims said.

"We have heard long-standing concerns from consumers about how frustrating, inconvenient, and costly these issues can be. We need to see more action from NBN Co and RSPs, especially now that the NBN rollout is entering its final stages."

In its draft decision [PDF], the consumer watchdog said NBN's existing service standard arrangements are not sufficiently robust.

"The absence of strong service level commitments supported by effective incentives have led to poor service performance outcomes and corresponding consumer harm," the ACCC said.

"The inquiry has revealed that NBN Co's current service standards do not necessarily align with the obligations that are already in place at the retail level."

Despite flagging a lift in the amount paid in rebates, the ACCC said it did not want a "general pass through requirement" that would force retailers to hand rebates to customers, with the one exception being missed appointment rebates.

The ACCC said NBN needed service commitments on a per-service basis instead of the aggregate basis it previously had.

"We consider that aggregate performance objectives limit incentives to drive improvements beyond the performance objective, and can hide pockets of very poor performance where performance is averaged out," it said. 

The new rebate structure is likely to be welcomed by the nation's telcos, with Telstra, Vodafone, and Vocus previously stating displeasure with rebates being a one-off payment.

"Rebates are a once-off AU$25 payment whether NBN Co misses a service level by one day or one month, yet clearly the customer experience in the latter scenario is much worse," Telstra argued.

"This lack of a time element in the rebates does not appropriately allocate risk and responsibility between NBN Co and RSPs, nor does it incentivise NBN Co to connect a service or rectify a service fault in a timely manner."

The NBN has previously rejected calls for a fixed-wireless rebate, saying it has already addressed the congestion issue through its AU$800 million fixed wireless network capacity upgrade and changes to its "network spectrum configuration".

The draft decision from the ACCC arrives in the midst of NBN conducting a wholesale pricing review, with the national broadband wholesaler flagging the introduction of three new plans at the top end of its pricing structure, all with lower upload speeds than its existing plans at those tiers.

The three plans offer 100Mbps download speeds, 20Mbps of upload; 250/25Mbps; and 1000/50Mbps. While the first of the trio will be available across all of NBN's fixed line technology, the latter two are currently slated to only be available on fibre-to-the-premises and HFC networks, with fibre-to-the-curb being considered.

The whole cost of the new plans, respectively, will be AU$58 per month for 3.75Mbps of included capacity, AU$68 per month with 4.75Mbps of included capacity, and AU$80 per month with 5.75Mbps of included capacity.

The included capacity would be bumped up by 0.25Mbps for all three plans in May 2021.

The ACCC said it expects its decision will complement NBN's wholesale negotiations with retailers.

"These proposed regulated terms will establish baseline service standards, while allowing parties freedom to bargain on specific terms," Sims said on Tuesday.

"We expect NBN Co and other service providers to identify more improvements that will benefit consumers."

In response, NBN said it has "every incentive" to improve its levels of service.

"It's in our best interest for customers to join the network as early as possible, stay connected, and ultimately take up higher value services over time," an NBN spokesperson said.

"However, we are concerned the draft determination announced today by the ACCC will not drive the right improvements in customer experience and could lead to unintended consequences."

Updated at 3.03pm AEST, 1 October 2019: Added NBN comment.

Related Coverage

TIO sees an increase in complaints about NBN services

However the numbers are sliced and diced, complaints about the NBN are up in absolute and relative terms.

Ziggy Switkowski reappointed as NBN chair

Meanwhile, the NBN has been touted by the government as boosting Australia-wide productivity.

NBN connectivity expands to ATMs, traffic, transport, and environment infrastructure

Network Extensions will initially only be available on fibre-to-the-node.

NBN pricing paper proposes new 100/20, 250/25, and 1000/50Mbps tiers

The 250Mbps and 1Gbps plans would only be available on fibre-to-the-premises and HFC networks.

Vocus hoping ACCC can solve broadband affordability if NBN cannot

Vocus CEO Kevin Russell attacks the CVC as a download tax, saying the market value of NBN is far less than what it had cost to build.