Watchdog eyes NBN reseller service agreement regulation

Watchdog eyes NBN reseller service agreement regulation

Inquiry set to consider if regulation is necessary to improve customer experience on the network

Credit: NBN

Australia's consumer watchdog has launched a public inquiry into National Broadband Network (NBN) wholesale service standards to work out whether regulation is needed to enforce service agreements with resellers.

Specifically, Australian Competition and Consumer Commission (ACCC)-led inquiry, which was prompted by continued complaints about NBN services from end customers, will focus on appropriate service standards at a wholesale level, including redress arrangements when consumers seek compensation at a retail level when those wholesale standards are not met.

Wholesale service standard levels are currently set out in commercial agreements that have been negotiated by nbn, the company behind the NBN's rollout, with its wholesale customers, that is, the network's retail service providers (RSPs).

“One of the main focuses of our inquiry will be whether there are appropriate incentives for nbn 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,” ACCC chairman, Rod Sims, said.

“While our inquiry will focus on NBN wholesale service levels, we will examine them in the context of the supply chain. 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.”

The ACCC said this includes performance objectives and operational targets that apply to nbn’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 has failed to meet a specific service level.

“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,” Sims said.

“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.

"This is important as what happens at the wholesale level often flows through to the retail level and affects customer experiences," he said.

Next month, the ACCC will release a consultation paper examining these issues and will also call for input on whether an access determination is necessary.

The consumer watchdog expressed concerns that as the scale and pace of the NBN rollout increases, these issues will affect a significant proportion of consumers unless improvements are made.

“We also believe increased transparency around service outcomes and clear consequences and redress options where standards are not met, by those best placed to manage the risk, will be important,” Sims said.

The ACCC will liaise closely with the Australian Communications and Media Authority (ACMA), which is also considering supply chain issues.

nbn told ARN that the company is in the process of finalising a new wholesale broadband agreement (WBA) with its RSPs, which includes new service performance commitments for activations and fault restoration.

The company said these new measures will help to "further improve the experience of end users on the NBN network. 

The measures include a new two-hour service level for hand-offs from nbn to RSPs. Additionally, the changes will mean that where there is an appointment reschedule, nbn will notify the RSP of the reschedule within one hour of the appointment being rescheduled.

At the same time, the new arrangement will see a new service fault rebate for RSPs where nbn doesn't meet fault restoration performance objectives.

The Telecommunications Industry Ombudsman (TIO) reported an almost 160 per cent increase in complaints from consumers about their NBN service in the past 12 months, the majority in relation to delays in connections, missed appointments and fault rectification.

In October, nbn, set up a dedicated national team to help improve customer experience in rural and regional areas, but it remains to be seen if it will make things easier for local resellers, who consistently deal with customer angst with the network when things go wrong.

As of October 1, nbn made changes to its business-grade wholesale pricing model, introducing a new spend cap on its high bandwidth business products enabling retail service providers to save on monthly wholesale charges.

The network provider’s Traffic Class 2 wholesale business offering is designed to support applications such as video conferencing, converged business collaboration, IPTV or gaming.  

Updated at 16:24 on 2 November to include comment from nbn.

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