ACCC inquiry into NBN Wholesale service standards

2 November 2017

The ACCC has today announced a public inquiry to determine whether NBN wholesale service standard levels are appropriate, and to consider whether regulation is necessary to improve customer experiences.
The inquiry 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,” ACCC Chairman Rod 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,” said Mr Sims.
Wholesale service standard levels are currently set out in commercial agreements that have been negotiated by NBN Co with its wholesale customers (retail service providers).

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.
“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,” Mr 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,” said Mr Sims.
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.
As the scale and pace of the NBN rollout increases, the ACCC is concerned these issues are likely to affect a significant proportion of consumers unless improvements are made now.
“We will consider what wholesale service standard levels are required to improve customer experiences. 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,” Mr Sims said.

“The ACCC will liaise closely with the Australian Communications and Media Authority (ACMA) as our inquiry proceeds. 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.”
The ACCC will next month release a consultation paper examining these issues and seeking views on whether an access determination is necessary.

Further information is available here: NBN wholesale service standards inquiry

Background
The ACCC has powers under Part XIC of the Competition and Consumer Act to set regulated terms and conditions of access to NBN services to promote the long-term interests of end users. NBN services are declared services. The ACCC may consider regulatory intervention through a binding rule of conduct, an interim access determination or a final access determination.
The ACCC recently published the communications market study draft report which included 29 recommendations spanning a wide range of competition and consumer issues in communications markets.

 

Release number: 
MR 192/17
ACCC Infocentre: 

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