Optus: NBN should face ‘real consequences for poor performance’

In its submission to the ACCC, Optus has joined Telstra, Vodafone, and Vocus in arguing that a AU$25 one-off rebate is not enough to incentivise NBN to repair faults in a timely way and stop missing connection appointments.

Australia's National Broadband Network (NBN) company currently faces no real consequences for missing appointments, providing poor services, not providing the speeds being paid for, and not fixing faults in a timely way, Optus has argued.

In its submission to the Australian Competition and Consumer Commission (ACCC) inquiry into NBN's wholesale service levels, Optus said an effective framework would be "robust, transparent, and with real consequences for poor performance" so that NBN is incentivised to improve services.

The AU$25 one-off rebate required of NBN "provides no incentive" to fix aged connections or faults, according to Optus.

"Without such consequence as soon as the service level timeframe is missed, there is no incentive for NBN Co to resolve the issue in a timely fashion," the telco said.

"Optus submits that any service level regime should include robust and challenging objectives with strong and clear consequences for failure that encourages a right first-time approach."

Similarly, in cases where a customer orders a service on the 50Mbps speed tier but their NBN connection is not capable of attaining that speed, Optus said it is the retailers that are liable to provide compensation.

"There are no consequences for NBN Co for failure to deliver services sold," Optus said.

And while NBN provides reporting on how many rescheduled appointments take place, "there are no consequences should NBN Co reschedule an appointment multiple times".

As a result, Optus argued in favour of wholesale obligations that ensure NBN delivers services that meet the speeds sold; develops an automated retail speed-testing process; does not charge for wholesale services that retailers are not permitted to charge customers for; and is liable for any costs incurred by retailers due to non-working NBN services where NBN is at fault.

Like Telstra, Optus also said it supports a daily rebate system for missed connections and faults, as well as escalating rebates after five business days to "provide greater incentive for NBN Co to meet its obligations in a timely fashion".

"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 in its submission.

"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."

Vodafone also called for a "vital shift" and "fundamental revision" in the wholesale broadband agreement, rather than simply implementing a rebates system; while Vocus suggested that NBN pay a daily, flat-rate rebate across fixed-line and fixed-wireless services, in order to properly incentivise NBN to repair faults.

NBN argued that it already has strong incentives, given it is "entirely reliant" on retailers to generate its revenue.

"There are competitive alternatives to NBN services in a number of markets and geographies, which will only grow over time as technologies such as 5G fixed-wireless are introduced," NBN said, saying commercial negotiations rather than regulatory intervention should be used.

The ACCC had in December published the next stage of its NBN investigation into wholesale service standards, including an examination of rebates for poor service, after kicking off the wholesale service levels inquiry the previous December.

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