Following a near two-year inquiry into NBN Co’s service standards, Australia’s consumer regulator is poised to announced new fines for the NBN operator if it fails to lift its game.
Under a draft determination proposed by the ACCC, the NBN operator will hopefully move faster to address customer complaints to avoid financial consequences, with fines proposed for a range of poor customer experience situations.
The fines proposed by the ACCC include:
- $30 per day (capped at $1,150) for not fixing faults in a timely manner
- $13.50 per day (capped at $270) for late or delayed network connections
In addition, it will be forced to offer increased rebates directly to customers – up from $25 to $75 – for missing technician appointments. NBN Co will also have to pay a $20 rebate to customers for congested fixed wireless services, and for those fixed line services – predominantly FTTN connections – which fail to meet certain minimum speed standards.
The move comes after the ACCC already accepted enforceable undertakings from the NBN last year to lift its standards, but the regulator is proposing increased regulatory response, saying that the previous improvements are not nearly enough.
There are two sets of rebates that NBN Co will have to pay on a daily basis.
The first concerns connections that are delayed or not completed in a timely manner. For these it will pay $13.50 per business day, capped at 20 days.
“We consider that the rebate should not be disproportionate or unnecessarily onerous on NBN Co,” the ACCC said.
“We have carefully considered the potential cost impact on NBN Co based on the confidential data it provided to us.
We consider that a connection rebate of $13.50 per business day for each missed connection service level, up to a cap of 20 business days, is appropriate.
We have set the rebate amount with reference to six months of revenue for the ‘typical’ NBN residential offer (the $45 a month bundle products), divided over the 20 business day rebate period.
We consider that a potential rebate amount equal to six months of revenue for a typical service represents a meaningful financial incentive for NBN Co to resolve a delayed connection, while ensuring the cost impact is proportionate.”
NBN Co isn’t that thrilled with the proposal, telling IT News that it didn’t think the proposed regulatory regime would drive the right improvements in customer experience, but I guess that’s the logical thing for anyone looking at facing a fine to say.
Given the industry dissatisfaction with the current NBN pricing model, and customers dissatisfaction with the quality of service being offered, it’s not surprising to see an increased regulatory response to try and improve the all around offering. We hope that the new pricing agreement – being negotiated at the moment – will deliver an increased range of plans better suited to customers needs, without removing existing plans (such as the NBN Premium 100/40 Mbps plan) that power users want.
Absent a major change in direction, the new regulatory process should be in place by the end of 2019.