ACCC expects more telcos to compensate customers over NBN FTTN speeds

Telstra, TPG and Optus have so far signed court-enforceable undertakings

The Australian Competition and Consumer Commission (ACCC) is expecting more retail service providers (RSPs) to compensate customers over their NBN fibre to the node (FTTN) connections.

The ACCC’s chairperson, Rod Sims, this morning told a Senate Estimates hearing that he expects more RSPs to sign court-enforceable undertakings, joining Telstra, TPG and Optus.

The ACCC in November 2017 announced that Telstra would compensate 42,000 customers who had FTTN and fibre to the building (FTTB) NBN services.

The customers concerned had signed up for FTTN or FTTB connections with theoretical maximum speeds that were unattainable due to line quality, distance from a node or similar issues.

“We had problems where retail service providers were selling NBN services that NBN couldn’t deliver, particularly on fibre to the node,” Sims said.

Around one in two customers with FTTN services were affected, he said.

Optus and TPG also committed to compensating customers.

Vocus, which owns Dodo and iPrimus, has previously indicated it may need to compensate customers but the ACCC has yet to announce any court-enforceable undertaking from the telco.

In addition to offering customers a range of options, such as a refund or shifting to different NBN speed tier, Telstra, TPG and Optus have committed to checking the maximum speed that a customer’s line is capable of within four weeks of a service being activated.

The commitment to checking maximum attainable speeds for connections is a “crucial change,” Sims said.

“That means they will only sell what NBN can deliver so if you’re not getting the speed you expect it should be up to whether or not the retail service providers have provisioned enough CVC off NBN,” he said.

CVC is the bandwidth purchased by an RSP and shared between an RSP’s NBN customers.

Sims said this year he expects a “lot better behaviour” thanks to the court-enforceable undertakings by RSPs and the ACCC’s guidelines for marketing NBN services.

In response to questioning by Greens Senator Jordon Steele-John, Sims said it was too early to make a call on whether the government should change its cost-recovery arrangements for NBN.

The ACCC in October last year released a draft report on the state of Australian’s communications market. It said that the government should examine potential changes to cost-recovery arrangements, which currently oblige NBN to deliver a return on the government’s investment in the company.

Possible measures could include debt relief or an asset re-evaluation, the draft report said.

“When that report was written there was a lot of discussion over the variable pricing – the so-called CVC pricing – and suggestions about whether that was inhibiting best use of the network,” Sims said.

“We also said that we’d look to see what NBN’s pricing changes were to see what effect that had. Since then, in December, NBN has changed its pricing and people have taken up more CVC.”

“What we were saying back then is you’ve got to keep those options on the table, but we need to see how this plays out,” Sims said.

“We need to see how our speed claim guidance plays out, our monitoring scheme plays out, the lower NBN pricing. We believed then and still believe now that it’s too soon to know whether there needs to be any review of the value of NBN but it’s something you need to keep an eye on as you go... forward.”

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