Australia starts enquiry into NBN’s wholesale service standards

The Australian competition regulator has started an enquiry into the National Broadband Network (NBN) and its quality of service.

The Australian Competition & Consumer Commission (ACCC) said today that its enquiry will focus on the ability to enforce appropriate service standard levels at a wholesale level, including redress arrangements when consumers seek compensation at a retail level when those wholesale standards are not met.

“We are very concerned about the high number of complaints from consumers around poor customer experiences, particularly in relation to customers connecting to NBN services and having faults repaired,” said ACCC chairman Rod Sims.

“Many of these complaints relate to matters set out in wholesale service level standards. We will examine whether the service levels that are currently in place are appropriate and effective.”

Wholesale service standard levels are set out in commercial agreements that have been negotiated by the NBN operator, state-owned NBN Co, with the retail telecoms service providers that are its wholesale customers.

ACCC said that they include performance objectives and operational targets that apply to NBN Co’s products and services, requirements to take corrective action if service standard levels are not met, and the framework within which wholesale customers can claim compensation for retail customers or receive commercial rebates where NBN Co has failed to meet a specific service level.

Sims said: “One of the main focuses of our inquiry will be whether there are appropriate incentives for NBN Co to remedy service failures, along with the adequacy of compensation available to wholesale customers, to ensure consumers in turn are provided appropriate redress when things go wrong.”

In response to the ACCC announcement Australian telecoms consultant Paul Budde condemned the way the NBN is run: “The current problems can’t be solved through regulatory changes. The underlying policy model is flawed and that issue will need to be addressed first before we can solve the rest of the mess.”

The ACCC said it “will liaise closely with the Australian Communications and Media Authority (ACMA)” in the enquiry. “ACMA is also considering supply chain issues to determine how they affect outcomes at the retail level, and has gained very useful survey data that we will tap into,” said the ACCC.

Budde said that the enquiry “will not solve the much bigger problem: the once in a lifetime missed opportunity of building a future-proof infrastructure that would have put us among our leading trading partners.”

He said Australia has “dropped from number 20 to number 60 on the international ladder”, and added: “Once the political problems have been solved we can again start working on closing the gap, which will take us another decade to do.”

Calling the NBN a “train wreck”, he said the original plan to build a fibre-to-the-home (FTTH) network was changed when the then Labor government that started the project was ousted in an election.

The new right-wing government “rolled out a totally different – second-rate – network under the policy, regulations and legislation of the original FTTH model”, said Budde. “Such a network would have been built by Telstra anyway without any taxpayers’ money.”

He added: “Telstra proposed a multi-mix technology broadband model in 2008 at no financial cost to the Australian taxpayers. Now, the government can’t expect to develop a working business model for the NBN based on a project that costs at least A$25 billion more than what it could have cost if it was done by private industry.”

At the ACCC, Sims said the enquiry would look at “whether there are appropriate incentives for NBNCo to remedy service failures, along with the adequacy of compensation available to wholesale customers, to ensure consumers in turn are provided appropriate redress when things go wrong”.

He added: “We are also concerned that some service levels at the retail level are not enforceable. If we identify other changes to aspects of the supply chain that will improve customer experiences on the NBN, we will certainly highlight them.”

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