NBN Co issued formal warning by the ACCC for preferencing telcos

The consumer watchdog isn’t happy with NBN Co after it was accused of playing favourites in the way it charges its prices.

In yet another PR blow for the company in charge of building the National Broadband Network, the consumer watchdog has issued a formal warning against it for playing favourites among the telcos it sells network access to.

The Australian Competition and Consumer Commission said that since at least January last year, NBN Co gave different terms to different retail service providers (RSPs), and also gave one company, Macquarie Telecom, pricing information for new business services before sharing it with others.

It then declined to give it to other retail service providers who asked about getting access to indivative pricing information for the new service.

The warning relates to NBN Co’s business-grade products announced in June last year including Enterprise Ethernet, which supplies high-speed uploads and downloads simultaneously.

It comes just a week after the ACCC announced it would seek to increase and expand the rebates NBN Co gives to telcos for providing poor service.

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NBN Co’s conduct amounted to “a serious breach” of its non-discrimination obligations, according to the ACCC.

While the commission said it didn’t find any evidence the conduct actually caused any specific competitive harm, NBN Co is prohibited from discriminating between telcos.

The warning relates to NBN Co’s new business services introduced last year. Picture: Cole Bennetts/Bloomberg

“The ACCC has concluded that NBN Co failed to comply with its non-discrimination obligations on a number of fronts,” ACCC chairman Rod Sims said.

“These legal obligations were enacted to ensure that NBN Co does not distort competition in the market for retail NBN services, such as by favouring larger RSPs.”

NBN Co has admitted after the investigation that it didn’t have adequate compliance processes in place to make sure it was meeting its obligations, and has committed to making sure it doesn’t happen again.

“The (court-enforceable) undertaking we have accepted from NBN Co is intended to ensure that all access seekers can compete on an equal footing going forward,” Mr Sims said.

NBN Co will introduce “extensive” compliance arrangements including an annual audit to make sure it complies with its obligations.

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Mr Sims said the commission would take further action if it isn’t satisfied with NBN Co’s conduct in the future.

An NBN Co spokesperson welcomed the “clarity and certainty” provided by its promise to the ACCC.

“The undertaking helps give certainty to both NBN Co and the market about the way we build our network and how Australian businesses can benefit.

“Many of these improved processes are now in place and communicated to our retail partners, and we look forward to implementing the remaining few obligations as outlined in the undertaking and working together with the industry to provide great customer experience to businesses,” the spokesperson added.

NBN Co CEO Stephen Rue said the NBN was the “economic engine of the nation” at a speech in Melbourne on Wednesday.

More than 600,000 businesses use an NBN service.

Connections are available to more than 10.2 million homes and businesses around the country, but so far only around 6 million have joined the network.

NBN Co CEO Stephen Rue said in a speech at the CommsDay Melbourne Congress on Wednesday that the NBN has “changed the competitive landscape of Australia’s telecoms sector for the better”.

“It’s helped boost retail competition, improve telco services in the bush, and fundamentally changed the way Australians live and work by offering universal broadband access across the continent,” Mr Rue said.

With only nine months to go until the rollout is completed, Mr Rue said NBN Co is now focusing on “finishing the job, making sure Australian individuals and businesses make the most of the network, and most importantly, improving the customer experience”.

Have you deliberately held off joining the NBN? Let us know in the comments below.