Consumer watchdog on NBN: We were never meant to get this situation

In switching to the NBN, some consumers will be left worse off by paying more and getting less, the consumer watchdog has warned.

The cost of living is rising in Australia, and these days, that includes basic internet plans.

The chairman of the Australian Competition and Consumer Commission (ACCC) used a speech in Sydney this afternoon to highlight how entry-level NBN plans are getting more expensive.

When moving onto the NBN, he said, consumers were having to pay more and, in some cases, getting less.

“We were never meant to get to a situation where some consumers, in switching to the NBN, will be left worse off by paying more, or getting less,” he said.

The NBN — a wholesaler who sells to space on the network to service providers like Telstra and TPG — changed its pricing structure recently to encourage greater take-up of bandwidth by making mid and top-tier plans more attractive.

But the ACCC blames the new pricing model for making basic plans more expensive, meaning many ISPs have moved away from selling them.

Prior to the NBN, consumers could find an internet and voice plan with 100GB of data per month for $50, or unlimited data for $60 per month.

“We are now observing prices of low-speed NBN plans offered to new customers that are at least $10 per month higher than what consumers paid for equivalent ADSL plans,” Mr Sims said. In some cases, plans with bottom-tier 12Mbps speeds cost nearly as much as 50Mbps plans.

He pointed to one example in which Optus increased its asking price for new customers acquiring an entry-level NBN plan to $80 per month — a significant $20 increase.

“Extraordinarily, this was $10 more expensive per month than its 50 megabit plan.”

An Optus spokesperson said “our pricing reflects NBN wholesale pricing” and pointed towards a 200GB wireless broadband option the telco offers for $60 a month as a more affordable option.

“There is a fundamental question of fairness here for those on low incomes,” Mr Sims said.

ACCC Chair Rod Sims wants pricing on basic NBN plans anchored. Picture: Peter Rae

Speaking at the CommsDay Summit this afternoon, he promoted the work of the ACCC’s Broadband Monitoring Program that gives consumers the ability to compare speed expectations and service quality across providers. But he said customers who wanted basic plans were losing out on price.

“We believe NBN Co’s entry-level services should be anchored to existing ADSL pricing. This is only fair to consumers because they have no choice but to move to the NBN as their existing services are being withdrawn,” he said.

In a statement, NBN said it was working to serve the entire country with its business model.

“Only by retaining a strong business model can NBN Co continue to invest in the network for the benefit of all Australians, serving the needs of the whole country well into the future as data and technology needs evolve,” the company said.

MISSED APPOINTMENTS 

At this point everyone knows someone who has an NBN horror story, and the boss of the country’s top consumer watchdog is no different.

Mr Sims began his speech this afternoon telling a story of a staff member who had waited through three missed appointments from an NBN technician.

“One of our staff who lives 7km from the Sydney CBD recently had three missed appointments in a row before getting connected,” he explained.

“The staff member had to be at home on a weekday from 1-5pm each time, and each time, on the day, no one showed. And there was no message to say no one was going to show.”

After much effort, they were compensated by getting the first month of internet for free from the retail provider but were left disappointed by the speeds.

“This person is now connected and has less than half the speeds they were promised on a 50Mbps plan and much less depending on which room of the house they are in,” Mr Sims said.

According to the latest figures released by the NBN, between July 1, 2018 and February 20 this year, the total number of missed technician appointments was 114,093 — a shade under 470 a day.

However, in about one-third of cases the technician is early or late but still completes the work.

Given the immense scale of the NBN project, missed appointments usually account for about 5 to 10 per cent of those scheduled.

In the NBN’s latest monthly update report, it said 84 per cent of homes and businesses were connected within agreed time frames with phone and internet providers.