Telstra, Optus, TPG and Vocus back NBN service terms inquiry

Extent of opposition to wholesale agreement revealed.

Telstra, Optus, TPG and Vocus – which control about 88 percent of the NBN market – have all publicly backed an inquiry into how NBN Co’s wholesale service standards are set.

The extent of industry backing the inquiry – which was announced by the Australian Competition and Consumer Commission (ACCC) in November last year – has, until now, been hard to quantify as retail service providers (RSPs) refrained about airing their concerns publicly.

The service standards are contained in NBN Co’s wholesale broadband agreement (WBA), the third version of which was launched late last year.

Behind the scenes, there has been widespread dissatisfaction with the terms contained in WBA3 as well as the way the process was run.

Most RSPs still signed on – a necessity to access new price deals, for example – but it became clear at least some had voiced frustrations to the ACCC, leading the watchdog to act.

The level of opposition to WBA3’s service terms has now become clear with the top four NBN RSPs all publicly backing the ACCC’s investigation.

Telstra said it “shares ACCC concerns about NBN service level standards that impact on connection, fault rectification and recourse to appropriate compensation.”

“Telstra’s position is that customers should be no worse off on NBN then they are today on Telstra’s legacy network,” it said.

“We are concerned that this is not currently the case, and that current service level standards proposed by NBN Co therefore do not enable a positive customer experience.

“The anticipated significant increase in the scale of the NBN rollout, and associated increase in the number of customers who will be connecting to and receiving service over the NBN, means that it is critical that these issues are resolved as soon as possible.”

Other major RSPs raised concerns that they had little to no input into the terms in the WBA, making the negotiation too one-sided.

This was revealed last year as a key concern that had stopped MacTel from signing the new agreement – and it appears other larger RSPs agree, despite signing up.

“NBN Co, as a monopoly operator with seemingly unlimited resources, has an agreement with RSPs that is unwieldy in size and constantly being changed by NBN [Co],” TPG said.

“RSPs have very little ability negotiate terms.”

Vocus went further, criticising the “confidential process” applied to WBA negotiations.

“Vocus believes that making the consultation process for the WBA confidential is unjustified, given that NBN Co is a government business enterprise that is obliged not to discriminate against access seekers,” it said.

“In Vocus’ view, confidential negotiations can increase NBN Co’s ability to simply brush aside well founded concerns of access seekers – i.e. NBN Co’s market power means that one on one negotiations are unlikely to achieve much.

“If the WBA is subject to a public consultation process, this will allow the ACCC to more easily identify areas, such as the inadequacy of service levels, where there is common ground among access seekers, and this will make it more difficult for NBN Co to simply use its market power to brush aside such concerns.”

TPG noted it would welcome – among other things – “a simple process for claiming credits for breaches of SLA”.

RSPs have complained it is too difficult to be compensated for activation problems, leaving them out of pocket for things that are outside their control.

Of the four main RSPs, Optus was the only one to keep its concerns with the WBA3 out of the public domain, though it clearly harbours some.

“Optus supports the ACCC’s decision to more fully explore issues concerning non-price
terms of access related to the supply of NBN services and to consider if further
regulation regarding NBN Co’s service level standards is warranted,” it said.

The comments of the big four RSPs are a precursor to what they might submit to the ACCC’s inquiry.

The ACCC revealed before Christmas last year how it intends to dissect the WBA3 deals struck with RSPs to understand how they contributed to consumer dissatisfaction with NBN services.

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