ACCC Discussion Paper on NBN Wholesale Service Standards Released

On Monday (18 December 2017) the Australian Competition and Consumer Commission (the ACCC) released a discussion paper seeking feedback for its inquiry into NBN wholesale service standards. The ACCC previously announced (on 2 November 2017), a public inquiry to determine in broad terms, whether wholesale service standards on the National Broadband Network (the NBN) were appropriate, and to consider whether regulation of those services is needed to improve consumer experiences (see our article: ACCC Launches Public Inquiry Into NBN Wholesale Service Standards).

Why the Inquiry

The ACCC said their decision to launch an inquiry has been made in the ". . . context of a high number of complaints from consumers", relating to poor experiences on the NBN, particularly in relation to connecting to NBN services and having faults repaired. Additionally, concerns were raised by industry that the service standards were not ". . . adequate to ensure a positive consumer experience on the NBN".

Current wholesale service standards are found in the commercial access agreements between NBN Co and its wholesale customers (known as "retail service providers" - RSPs). The current standards include "performance objectives and operational targets" applying to NBN Co’s products and services, relating to requirements to take corrective action if operational targets are not met, and a framework within which wholesale customers can claim compensation for retail customers or receive commercial rebates where NBN Co fails to meet a specific service level.

Because the NBN has reached "its peak rollout stage" it’s role as a service provider, as opposed to a network builder, is becoming more significant as a greater number of consumers connect to the NBN, focusing on the nature and quality of consumer experiences on the NBN, particularly as complaints from consumers about their experiences migrating and being connected to the NBN have increased considerably according to the ACCC.

The ACCC says, it is ". . . concerned that consumer experience issues may continue to increase unless improvements are made along the supply chain". Further, Current reviews of consumer experiences to date suggest that the wholesale service standards that have been set through commercial negotiation may not be promoting good consumer outcomes.

What the ACCC Can Do

Among the responses the ACCC can make is the setting of regulated terms and conditions of access to NBN services under the Competition and Consumer Act 2010 (Cth) (the CCA) Part XIC (whcich deals with the Telecommunications access regime) to promote the "long-term interests of end-users" (LTIE). The powers under the CCA Part XIC, include the ability for the ACCC to determine regulatory terms on an interim basis while a long-term determination is considered. Regulated terms and conditions of access determined by the ACCC will operate as a fall-back position during discussions between NBN Co and RSPs.

The Discussion Paper

The discussion paper outlines the key issues for the inquiry and invites submissions from interested parties. The ACCC says that, it is, in particular, seeking input to inform its view as to the making interim regulated terms in the first half of 2018. The ACCC in considering whether to make interim regulated terms, will consider the cost implications for NBN Co in meeting improved wholesale service standards together with the benefits to consumers through improved operational outcomes.

Scope of the Inquiry as Detailed in the Discussion Paper

The Discussion Paper uses the phrase "NBN wholesale service standards" to refer to:

• NBN Co’s service levels as set out in its Wholesale Broadband Agreement with RSPs, including performance objectives and operational targets for service levels, as well as requirements for NBN Co to take corrective action and provide compensation or commercial rebates if service standards are not met, and
• other non-price aspects of NBN Co’s wholesale arrangements that are likely to influence consumer experience.

The ACCC inquiry is to look at the wholesale service standards most likely to influence the end-user experience - including an examination of:

• the scope of wholesale service standards,
• the appropriateness of incentives for NBN Co to remedy service failures,
• the adequacy of compensation available to NBN Co’s wholesale customers, to ensure  that consumers at a retail level receive appropriate redress when wholesale standards  are not met,
• wholesale service standards in the context of the supply chain, including the implications for retail service levels and co-ordination between wholesale and retail providers,
• the level of transparency around service outcomes, and
• any other wholesale activities that influence consumer experience.

The ACCC says that the purpose of the Discussion paper is to seek views from stakeholders on issues relating to wholesale service standards on the NBN and points out that it may also seek information from relevant stakeholders by issuing notices under CCA section 155. The ACCC states that it is, considering whether regulatory intervention is necessary, and, if so whether to make a "final access determination" (a FAD) that will include non-price terms and conditions. The ACCC will also consider whether more immediate action is required by means of an "interim access determination "(IAD) or a "binding rule of conduct" (BROC).

Making a Submission

The full details for making a submission are contained in the Discussion Paper . Key points are that the ACCC states that it prefers to receive submissions in electronic form, in either PDF or Microsoft Word format because it allows the submission text to be searched. It states that those making submissions should ensure that "redacted information" is not searchable or otherwise able to be disclosed and that submissions should be made by 5 pm Friday, 16 February 2018.

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ACCC seeking feedback on NBN wholesale service standards (Media Release)

NBN wholesale service standards inquiry (Project overview)

ACCC inquiry into NBN wholesale service standards (Discussion paper)