ACCC kicks off NBN wholesale service levels inquiry

The ACCC is seeking feedback on whether NBN's current negotiated wholesale service levels provide incentives for improving customer experience and repairing faults.
Written by Corinne Reichert, Contributor
(Image: ACCC)

The Australian Competition and Consumer Commission (ACCC) has published its discussion paper investigating the National Broadband Network (NBN) company's wholesale service standards.

NBN's wholesale service standard levels are presently set out in its commercial agreements with retail service providers (RSPs), and include performance and operational objectives and targets for NBN's services; requirements for when service levels are not met; and the framework under which RSPs can claim rebates or compensation for their customers when NBN fails to meet its service levels.

The ACCC is now asking for feedback from industry on whether it should make a final access determination (FAD) regulating non-price terms and conditions such as NBN's wholesale contracts on connecting customers, fixing faults, and organising appointments, as well as rebates and compensation for when NBN misses its wholesale service targets.

The ACCC is additionally considering making an interim access determination (IAD).

"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," ACCC Chair Rod 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 concerns 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 ACCC inquiry into NBN wholesale service standards: Discussion paper [PDF] identifies 38 specific questions for which the regulator is seeking answers, including whether an IAD or FAD would impact the wholesale service agreements; whether reducing service level timeframes or improving performance objectives would improve user experience, and how to balance the costs of these; and whether the structure of connection and fault rebates incentivises NBN to fix faults in a timely manner.

The ACCC is also asking whether commercial negotiations on NBN's service standards enable competition; whether the current service levels and performance objectives for network availability and utilisation management provide certainty that NBN is managing network capacity especially during peak periods; whether fall-back service standards are required; and whether additional service level commitments should be set for the post-rollout period.

In terms of reparations, the ACCC is seeking comment on whether there are service standards covering commercial rebates for not meeting performance objectives that could improve user experience; whether the enhanced fault rectification rebates result in faster fault rectification, and whether these rebates flow through to users; whether RSPs are able to claim costs from NBN; what impact a third-party claims regime would have on RSPs, NBN, and consumers; and whether liability caps are likely to be reached.

"Why do retail customer contracts for NBN broadband services not, in general, reflect the wholesale NBN service standards, particularly for connections, faults, and appointments? Please detail the key drivers for this and provide evidence to illustrate," the ACCC added in its penultimate question.

It is accepting submissions on NBN's wholesale service standards until February 16.

The ACCC had announced in November that it would be conducting a public inquiry into the appropriateness of NBN's wholesale service standard levels.

Sims at the time said the ACCC is "concerned" that some of the retail-level service levels are unenforceable.

The announcement followed the ACCC publishing its Communications Sector Market Study: Draft report [PDF], which said "immediate measures" are needed to address dissatisfaction with speeds and rising consumer complaints.

The commission's report had pointed to the Australian Communications and Media Authority (ACMA) research on NBN migration issues, and said it would be proposing to examine NBN's service standards, particularly in regards to "incentives in place along the supply chain".

Also needing investigation is the "allocation of responsibility" for faults between NBN and RSPs, the regulator said, along with whether there are incentives for repairing faults and compensation for consumers.

The ACCC said it also supports recent amendments made to the Telecommunications Industry Ombudsman (TIO) terms of reference requiring NBN and RSPs to cooperate on resolving consumer complaints, and said the TIO should collate NBN complaint data according to technology type.

Migration and experience issues also "stem from failures in retail and wholesale markets that could largely be overcome through more accurate information, improved information flows, and better coordination", the ACCC said, adding that speed issues can be addressed by improved information from retailers such as abiding by its recently released guidance on how RSPs should advertise NBN speeds.

Speed advertising compliance should be enforced through Australian Consumer Law as of 2018, it added.

The ACCC has since stepped in to force Telstra and Optus to refund tens of thousands of NBN customers after not providing them with the speeds they were paying for.

The ACCC last week also announced that it is taking action against Optus in the Australian Federal Court, alleging that the telco misled customers about having to migrate from its hybrid fibre-coaxial (HFC) network to the NBN.

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