NBN Co may have to pay users stuck in congested wireless cells

NBN Co is facing the prospect of paying rebates to users in congested wireless cells, as well as daily rebates where any network connection is dogged by a fault for a long time.

The ideas are raised by the Australian Competition and Consumer Commission (ACCC) in a new consultation paper released today.

The paper forms an expansion of the ACCC’s wholesale service standards inquiry launched at the end of 2017, which has already seen NBN Co agree to pay out rebates to retail service providers where connections don’t go to plan.

NBN Co has faced repeated questions throughout 2018 over the capacity of its fixed wireless network, and the number of users whose services don’t achieve speeds they were sold.

It has previously said that take-up and usage is much higher than was scoped when the network was designed back in 2011, leading to the problems.

The company is set to spend $800 million extra to remediate the network. It has also raised a novel restructure of the network as a way to solve some of the issues.

Others say that fixed wireless users should be switched over to fixed line, relieving some pressure on the existing network.

The ACCC has now raised a third prospect: effectively a financial penalty that NBN Co must pay in instances where fixed wireless users receive below-par performance.

“While we acknowledge that NBN Co is taking steps to address congestion, we consider that the provision of a rebate that would be payable based on each end user on a congested cell would incentivise NBN Co to ensure there is sufficient capacity on the network on an ongoing basis,” the ACCC said.

“It would also recognise that NBN Co is not delivering the full capability of its fixed wireless service to end users when they are impacted by congestion, especially during the critical busy hours.”

The ACCC indicated it will also examine the type of fixed wireless speed information that RSPs have available to them at the time of sale, so consumers can better decide whether NBN fixed wireless is for them.

In addition, the ACCC also today raised the prospect of more punitive rebates generally where a connection problem or fault exists for an extended period of time.

“We note that the [current] rebate structure could be further improved in cases where connection delays or faults extend over a longer timeframe,” the ACCC said.

“We see strong merits to the suggested model of a daily rebate to provide additional incentives for timely connections and fault rectification, and to ensure appropriate management of consumer experience in these cases.”

The watchdog will also examine how rebates paid out by NBN Co are passed through by the RSP to the customer.

It isn’t necessarily examining direct pass-through but rather indicated it would examine the “fair value benefit” that consumers wound up receiving when there were problems with a connection.

End of blame game?

The ACCC is also canvassing whether to force NBN Co to change its liability and indemnity clauses and accept more of the blame when things go wrong - and therefore have to pay out more rebates.

“We consider the indemnity provisions could transfer the risk of certain matters within NBN Co’s areas of responsibility to either customers or RSPs,” the ACCC said.

“We are concerned that this may result in downstream consumers or end users bearing liability for risks over which they have no control, or which NBN Co is in a better position to manage.”

In a similar vein, NBN Co could be forced to revert to an old way of handling so called “trouble tickets”, which in the past have been blamed for a lot of the back-and-forth between NBN Co and RSPs when an end user has a problem.

NBN Co currently only measures the time taken time to resolve a ticket from when they accept it, rather than when they acknowledge receiving it.

The ACCC said it did not consider this to be “justified”.

“While we recognise NBN Co’s efforts to improve the timeframes for reviewing trouble tickets, we consider that timely validation of trouble tickets should be part of its ordinary operational processes,” it said.

“Further, we consider commencing fault rectification from trouble ticket acknowledgement is preferable to the current process as it would more closely align with the end user’s experience of the fault.

“We understand that this change would be a reversion to the measurement of the end user fault rectification service level timeframes as they applied prior to [the current wholesale broadband agreement].”

Watching over WBA4

NBN Co will also now have Australia’s competition watchdog over its shoulder as it negotiates a new wholesale agreement with retail service providers at the end of next year.

The extension of the wholesale service standards inquiry, which was meant to wrap up at the end of this year, means it will now run through until at least October 2019.

The inquiry itself was formed when RSPs controlling 88 percent of the NBN market complained that NBN Co had refused to negotiate with them over terms in the commercial agreement, known as wholesale broadband agreement three (WBA3).

ACCC chairman Rod Sims took the unusual step in February this year of saying the commission would regulate NBN Co, no matter the outcome of the inquiry.

The government tried to head that off, to no avail, and the ACCC went on to extract a court-enforceable undertaking from NBN Co in September, under threat of an interim determination.

The undertaking brought in relatively unconditional rebates for missed KPIs like appointments, and also forced NBN Co to publish additional data on congestion.

But the ACCC now says even the undertaking may not have gone far enough, and - ahead of the expected start of negotiations on the WBA4 - says it will extend its inquiry to run in parallel to these negotiations.

It is a not particularly subtle warning fired over NBN Co’s bow that alleged behaviour that led to the ACCC inquiry being set up won’t be tolerated again.

“We note that the current version of NBN Co’s wholesale broadband agreement (WBA3) is due to expire in November 2019, with negotiations expected to take place between NBN Co and RSPs on WBA4 during 2019,” the ACCC said in a discussion paper today. [pdf]

“In addition to informing our consideration of whether further regulation is necessary to improve consumer experience on the NBN, we consider the public consultation undertaken for the purpose of this inquiry, and the identification of specific issues or concerns by stakeholders, will be useful in informing discussions between NBN Co and its customers.”

The watchdog also said the extension would allow it to measure the outcomes from the initial undertaking.

The ACCC said it had favoured extracting the court-enforceable undertaking from NBN Co over issuing its own interim determination because it brought more immediate resolution to “pressing issues” the inquiry raised.

“We consider that the enforceable undertaking given by NBN Co addressed a number of issues that were of immediate concern in this inquiry,” it said.

“[However], we are now considering longer term issues and matters that were raised in submissions to the initial discussion paper that have not been addressed in the enforceable undertaking.”

The ACCC said it could decide to make a final access determination (FAD) on NBN Co - a regulatory instrument that has previously been used on Telstra to make it behave on reselling copper services through the RSP channel.