ACCC launches inquiry into NBN’s service standards

The competition watchdog has launched an inquiry into the NBN’s service standards, with a view to protecting burnt users.

NBN installers in Cheltenham, Victoria, Australia.

The competition watchdog has launched a public inquiry into the National Broadband Network over its customer service levels with the view to introducing new minimum standards and fines if it does not comply.

The Australian Competition and Consumer Commission said it would investigate failures by NBN Co — such as flawed internet connections and missed appointments by installation contractors — and it was likely introduce new legislation to crack down on the growing problems.

ACCC chairman Rod Sims said the NBN monopoly was bound by the ACCC’s rulings on pricing, but it faced no regulation regarding the quality of service it provided.

“When the NBN was set up, we set up a high-level pricing construct but did not set up standards, we left that up to the NBN and (telcos) to agree on,” Mr Sims told The Australian.

“But that doesn’t seem to be working very well and we are stepping in.”

The announcement comes after the Telecommunications Industry Ombudsman reported an almost 160 per cent increase in complaints from consumers about their NBN connections over the past 12 months.

“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,” Mr Sims said.

An NBN Co spokeswoman said NBN Co would work “constructively” with the ACCC on its inquiry and it and was pleased the inquiry would focus on “the entirety of the supply chain”.

The NBN sells wholesale internet connections to telcos, such as Telstra and Optus, who sell internet packages directly to the public.

The two main sources of complaints centre around slow internet connections during peak times — which are general caused by telcos scrimping and failing to buy enough “bandwidth” from NBN Co — and sloppy physical NBN installations or instances where properties facing weeks or months without the internet, problems which are generally the fault of NBN Co.

Telstra, which accounts for about half of all NBN connections, faces strict regulations around service, meaning it must compensate customers if services fail or do not meet required standards.

It must provide this compensation even if NBN Co is the source of the problem.

The lack of similar regulations facing NBN Co has meant it is difficult for Telstra to recoup these costs in the event NBN Co is to blame.

“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 (telcos), to ensure consumers are in turn provided appropriate redress when things go wrong,” Mr Sims said.

ALP communications spokeswoman Michelle Rowland said the federal opposition welcomed the inquiry as NBN Co had become “a law unto itself”.

“Retail providers are accountable to their customers and the (Ombudsman) — but it’s not clear who NBN Co is accountable to,” Ms Rowland said.