Improving the NBN Customer Experience

5.1        This chapter examines various proposals for regulatory and practical changes aimed at improving the end-to-end experience of consumers on the NBN. A primary point of focus is consideration of proposals designed to give consumers clearer and more accurate information about NBN services at all relevant points of contact. These would allow consumers to make better choices about which service provider and which plan will meet their needs, and ensure that all pertinent information is disclosed by RSPs in their interactions with customers.

5.2        The chapter also examines the need for the introduction of broadband or service performance guarantees, which would ensure that consumers and other players in the supply chain have clear, enforceable rights in respect of the timeliness and quality of their service. The role of the Telecommunications Industry Ombudsman (TIO) in resolving NBN complaints is also considered, with suggestions made relating to the scope of the TIO's powers in resolving complaints.

5.3        nbn has advised the committee that the rollout of its network is now more than halfway through. Given the significant experience now inside the nbn, the RSPs, the regulators and the Department of Communications and the Arts (the Department), the committee believes that many of the common complaints driven by systemic inadequacies would have been rectified by now.

5.4        In previous chapters the committee has referred to evidence about consumer complaints. They can be grouped as follows:

1. The initial connection (Migration Experience):
   1. delays in connection once an area is declared ready for service;
   2. absence of a plan to connect premises that are declared 'Service Class 0' or equivalent;
   3. missed appointments and multiple call backs;
   4. poor coordination between nbn and RSPs;
   5. blame shifting between nbn and RSPs for failure in initial connections; and
   6. poor back of house procedures in RSPs for dealing with complaints.
2. Network Reliability and Network Performance:
   1. loss of service; and
   2. customers not getting the speeds that they thought they were paying for.
3. Transparency and the Adequacy of Information:
   1. information about network performance at a per premises level;
   2. marketing practices of RSPs; and
   3. awareness of consumer rights and dispute resolution processes.

5.5        The committee has heard some evidence from the Department, nbn, and others regarding attempts to implement measures that will improve the NBN customer experience. The material before the committee to date indicates that these measures fall short of what is needed.

5.6        Officials from the Department noted the following at a public hearing of the committee in June 2017:

[nbn] is taking steps to address its engagement with retail service providers and end users to improve the overall customer experience. Recently the company announced a restructure where it established two executives with a customer focus: one focused on residential customers and one focused on business customers. The company has also established a program specifically to look at the end user experience to see how its systems and processes interacts with the retail service providers to improve the flow of information and the speed at which it can provide connections to end users. The company has through that process written out to its major retail service providers, and they have started a series of mutual discussions to look at how their systems can be redesigned to aim to address those issues that are causing delays or lack of information for the consumers.[1]

5.7        Mr Bill Morrow, Chief Executive Officer, nbn, stated further at the committee's Sydney public hearing:

We have a company-wide focus on customer experience, so working with the industry to rectify this is clearly a top priority for the company. We look at the root causes of issues and identify how we are going to fix them. In doing so, we look at what NBN is responsible for and what sits outside of NBN's responsibilities with RSPs or with delivery partners, and of course we look to collaborate with all of them to help fix the issue and make this a far simpler, more straightforward process for the end users.[2]

5.8        A Departmental official commented in May 2017 that the Department is taking a coordinating role in attempting to drive change in this area:

Importantly we are looking at developing sets metrics so that we can accurately report on improvements in customer service at NBN level and also the retail service provider end... [We] very much see it as our role to draw together all of the work that has been done at the retail service provider end, very closely work with the NBN and understand improvements and changes in their service standards at the NBN end, and work with the ACMA, the ACCC and the TIO and the sector on where improvements can be made. So there is not a single approach that we could take that will necessarily solve the problem. It needs to be industry, government and the NBN working together to resolve the issues.[3]

5.9        The committee's recommendations in this chapter are aimed at improving services and consumers rights for end users of the NBN.

Introduction of broadband service or performance guarantees

5.10      As discussed in Chapters 3 and 4, many customers have had extremely poor experiences during the installation and connection process, as well as encountering difficulties when attempting to have faults with their NBN service rectified.

5.11      Several submitters and witnesses suggested that enforceable service or performance guarantees should be introduced in order to protect consumers connecting to and using the NBN network. For example, the Regional, Rural and Remote Communications Coalition submitted:

There are no guaranteed service connection or fault repair timeframes for broadband services; nor are there any independent reliability measures. This creates a gap in policy and puts all consumers in a vulnerable position. Already the lack of service guarantees and safeguards are leading to complaints, concerns and debates about NBN services. This is more evident for regional and rural consumers for whom nbn does not offer any guarantees, even though they may rely solely on nbn services for their communication needs.

In an environment where consumers are passed between retail service providers and nbn, it is vital that lines of accountability between the wholesale provider and a consumer are established. In order for consumers to use and benefit from services, there must be a minimum level of service. Establishing this would provide the transparency and accountability which is currently missing. Additionally, regulatory bodies such as the ACMA should have oversight of the performance of the network and the powers to determine service levels and rebates when the network does not perform.[4]

5.12      ACCAN noted that while there are contractual arrangements between RSPs and nbn (through the Wholesale Broadband Agreement), these 'do not provide a safeguard for consumers and their services'. It argued:

There needs to be clear lines of responsibility and standards which set out acceptable levels of network operations and services. Creating lines of accountability between the wholesale provider and a consumer is more likely to create a network responsive to consumer needs.[5]

5.13      ACCAN argued that the changes required include:

• wholesale service obligations setting timeframes for connections, fault repairs, and network reliability benchmarks;
• arrangements to deal with the tension between wholesale and retail end user obligations; and
• incentives to comply in the form of end user compensation, penalties and wholesale pricing considerations.[6]

5.14      Ms Rachel Thomas, Policy Officer for ACCAN argued that these measures would reduce the ability of nbn and the RSPs to blame shift on customer issues:

So what our service standards recommendation and policy position relates to is making sure that there are clear standards on each level and that consumers know what to expect from their service. It reduces that finger pointing because they will know exactly when the connection time frame is supposed to happen, what kind of level of reliability they can expect and how many moments of outages there possibly will be on the service. At the moment, from a consumer's point of view, that is very vague.[7]

Extension of the existing Telecommunications Customer Service Guarantee

5.15      The existing Telecommunications Customer Service Guarantee Standard applies to telephone services, and specifies time frames for the connection of specified services, the repair of faults and the attendance of appointments by service providers. Customers are entitled to compensation if these time frames are not met.[8] Several submitters argued that this guarantee should be extended, or a separate guarantee introduced, to cover broadband services. For example, the Queensland Government stated:

The current Customer Service Guarantee for telecommunications is a standard designed to encourage service improvement and guard against poor service. Phone companies are required to meet minimum performance requirements for specified services and compensate customers when these are not met. Similar guarantees are currently unavailable for broadband services. This situation needs to be updated to reflect the new telecommunications model that is being implemented through the NBN.[9]

5.16      Better Internet for Rural, Regional & Remote Australia argued that an updated Customer Service Guarantee should deal with issues including: minimum data allowances; availability; accessibility; affordability; upload and download speeds; quality of service; and customer service and repair timeframes.[10]

5.17      A representative of the Department noted in May 2017 that a departmental review of consumer safeguards in the telecommunications industry is currently in progress. This review comes in the context of the Productivity Commission's report to government on the future of the Telecommunications Universal Service Obligation (USO):

The consumer safeguards review has been contemplated...as a response to the [2015] regional telecommunications inquiry. It is also something referenced by the PC's review of the USO. We have a number of moving parts in this space. Consumer safeguards are seen as probably the last piece that will consider the entirety of the findings of the USO review and then how that plays out in an NBN environment. The consumer safeguards review is an internal department process, but there will be consultation with industry and stakeholders about how we position a consumer framework in the future to make sure it is effective and relevant to consumers.[11]

5.18      It was noted that the future of the Customer Service Guarantee would be considered as part of this review:

We expect that [the review] will be done in phases. We are looking at having short term, medium term and long term. We are ultimately looking at taking the consumer framework to be as relevant as possible in a post‑NBN environment. So we are looking at the period of the rest of the rollout to prepare and gradually implement changes to ensure that the framework suits the needs of consumers in that environment.

... [The Customer Service Guarantee] will be part of the review in terms of discussing with consumers, industry et cetera how we make the protections and the guarantees involved in that CSG relevant in a post-NBN environment. Is it something consumers value, do we want to take it forward, and how should it be shaped?[12]

Committee view

5.19      The committee believe that access to affordable reliable broadband services are essential to participation in modern society and to running a business. The lack of enforceable rights and protections for consumers is a significant regulatory deficiency that cannot be allowed to continue. Examples cited in Chapter 3 show that delays in fault rectification and disruptions to service can have a significant monetary cost to individual customers and small business operators relying on the NBN. Businesses and their representatives have raised the concerns about the lack of business grade products which would provide service rights and remedies in the business environment. Customers have found it difficult to resolve complaints; are subject to onerous requirements in terms of proving economic loss; and have often been unable to gain any financial compensation.

5.20      The committee notes the Department has been reviewing consumer safeguards in the telecommunications sector for some time. The committee believes that lack of progress in developing new consumer protections is leaving business and residential consumers at risk. Appropriate customer protections must be established for broadband services, including: service connection and fault repair timeframes; minimum network performance and reliability; and compensation arrangements when these standards are not met.

Recommendation 12

5.21      The committee recommends that the regulation of broadband wholesale services be overhauled to establish clear rights and protections for suppliers and end users of NBN broadband services. This framework should include: service connection and fault repair timeframes; minimum network performance and reliability; and compensation arrangements when these standards are not met. The committee requests that the Department brief the committee on progress in developing these protections by December 2017.

Recommendation 13

5.22      The committee recommends that nbn and RSPs develop business grade products specifically designed for the small business market which provide service guarantees and remedies. The committee requests that nbn and the Communications Alliance report back to the committee on progress in developing these products by December 2017.

Role of the TIO in resolving customer complaints

5.23      The committee heard evidence from some stakeholders that specific changes to the role and function of the TIO may enhance the resolution of customer complaints relating to the NBN.

Capacity for the TIO to play a 'broker' role between nbn and RSPs to resolve complaints

5.24      The capacity of the TIO to force nbn and RSPs to meet in order to resolve complaints was discussed at several public hearings of the committee.

5.25      The current Ombudsman, Ms Judi Jones, stated that while the TIO is working on getting nbn actively involved in resolving complaints, it does not have formal powers to coerce nbn and RSPs to meet in order to resolve issues.[13] When asked about occasions where there are multiple parties involved in a complaint issue (for example, nbn, delivery contractors and an RSP) and blame-shifting is occurring about who is responsible, Ms Jones expressed the view that it would be helpful for the TIO to be able to get all the parties involved in the resolution of the complaint.[14]

5.26      In a further response to a question on notice about what the TIO required in order to better be able to resolve complaints, the TIO stated that having 'the authority to require all the relevant parties in the supply chain to cooperate with the TIO and to provide information to the TIO would assist the resolution of complaints'.[15]

5.27      Several other witnesses who gave evidence to the committee agreed with the proposition that the TIO should be given formal powers to compel nbn and RSPs to meet in order to resolve complaints. For example, Mr Alex Green from Mansfield Shire Council stated that in the absence of such a mechanism, it 'would seem to allow the buck‑passing to continue' between nbn and RSPs.[16]

5.28      When questioned on whether the TIO's remit should be expanded to allow it to convene meetings of nbn and RSPs in order to resolve complaints, a representative of the ACMA expressed the view that in cases where the practical solution for the consumer is outside the control of the RSP, it may be appropriate for the TIO to be able to engage whoever is best placed to resolve the practical problem.[17]

To what degree should nbn be subject to the TIO scheme?

5.29      Under the current operation of the TIO scheme, complaints are only registered directly against nbn in a limited number of circumstances, namely: where the complaint relates to nbn's entry onto land to install equipment; and where the complaint pertains to property damage by nbn.[18] All other complaints are registered against the customer's RSP. Ms Jones explained in evidence to the committee why almost all complaints are logged against the RSP:

The consumer, whether a residential consumer or a small business consumer, has their primary contract with the retail service provider. Behind that there will be contractual arrangements perhaps with a wholesaler or an aggregator, and through that or directly a contract with NBN Co. When we register complaints we register them against the retail service provider, even those that may be a complaint about a service delivered over the National Broadband Network, and NBN Co may have a part to play in it, because that is where the contractual relationship lies.[19]

5.30      The committee heard evidence of cases where the inability to lodge complaints against nbn had resulted in customers being unable to gain a resolution from the TIO.[20] Some stakeholders expressed the view that the TIO should be able to register complaints directly against nbn in cases where it is responsible for the issues underlying a complaint. For example, Mrs Kylie Stretton, Co-Founder of Better Internet for Rural, Regional and Remote Australia told the committee:

[We are aware of the TIO], but unfortunately NBN are not touchable by them, because they are a wholesaler and not a retailer. A lot of our members say, 'We'll just ring the TIO.' When they do that and they lodge a complaint then the retail service provider is immediately slugged with a fine and it may not always be their fault. It might be NBN's fault, but they are untouchable by the TIO at the moment. Even though it is a good thing that they can lodge a complaint, it is not fair on the retail service providers if it is not their fault and they get a fine because, to us, that is less money that they have to put towards customer service.[21]

5.31      The ACMA has stated publicly that the TIO arguably should be given the power to make determinations and resolve complaints where wholesale providers such as nbn are at fault:

Recently, the ACMA has seen an increase in the number of consumers referred to the ACMA because the TIO is unable to handle their complaint. Typically, these complaints involve a 'wholesale' provider (most commonly nbn) with whom the complaining consumer has no direct relationship.

Consideration should be given to modifying the TIO scheme so that the TIO can deal with complaints across the supply chain.

If the 'root case' of a consumer or small business problem lies at the wholesale level, it is arguable that the TIO should be able to make a determination that binds the wholesale level provider (for example, a determination requiring the wholesaler to compensate the consumer or reimburse the retailer). Arguably, the TIO should also be able to apportion its complaint handling costs to the party or parties best placed to resolve the complaint.

Such an institutional change is likely to strengthen the incentives for wholesalers to address problems promptly even without TIO intervention.[22]

5.32      At a public hearing in August 2017, nbn CEO Mr Bill Morrow expressed the contrary view that nbn should not be subject to the TIO scheme in the same way as retailers are.[23] Mr Morrow argued that this is because the TIO cannot differentiate as to which company is at fault in most complaints, elaborating as follows:

It's too complicated to isolate it and say, 'Okay, give us your opinion on just the NBN bit of this', and I think the TIO recognise that. They tried to do this, in terms of the fault found or discovered. If a complaint comes through and they don't know, they send it to RSP X and NBN. It comes back and NBN raise their hand and say: 'We fouled up on this. We didn't get out there at the time we told the customer. It's rectified, and we'll be out there Tuesday to get this sorted.' The TIO can do a check mark and say, 'Okay, that one clearly is an NBN related issue.' But that's the minority of cases, not the majority; hence the complexity and difficulty in being able to say, 'We're going to determine NBN Co related faults for a national broadband network issue' when they can't differentiate.[24]

5.33      Mr Morrow did state, however, that in the minority of cases where it is clearly established that nbn is responsible for the cause of the complaint, nbn should take responsibility for paying the TIO costs associated with that dispute, rather than the RSP paying those costs as is current practice.[25]

Current independent review of the TIO

5.34      It was noted during the committee's inquiry that the TIO is currently undergoing an independent review, in accordance with legislative provisions that require a review of the TIO every five years.[26] The review is being undertaken by an independent consultancy firm and is considering various issues relating to the TIO's role and powers, including:

• the effectiveness of the TIO's complaint resolution processes, systems and resources;
• the effectiveness of the TIO's approach to systemic issues in improving telecommunications provider practices;
• the adequacy of the TIO's authorising environment (including the legislative framework and the TIO's Constitution and Terms of Reference); and
• the effectiveness of the TIO's engagement with government, regulators, consumers, industry and other stakeholders.[27]

5.35      The TIO published an issues paper relating to the review in May 2017, and has received 22 submissions to the review. The report of the review was due to be provided to the Ombudsman by 29 August 2017.[28]

Proposed changes to TIO terms of reference

5.36      On 23 August 2017, the TIO announced proposed changes to its terms of reference. These changes would:

• reflect the legislative requirement for carriers and intermediaries in the supply of telecommunications services (such as aggregators) to belong to the TIO scheme;
• strengthen the obligation on members to provide information requested by the TIO in order to resolve a complaint; and
• strengthen the obligation on members to cooperate with TIO decisions.[29]

5.37      In relation to the provision of information, the proposed changes would make it clear that the TIO can obtain information from any TIO member in relation to a complaint, not just the RSP against which the complaint has been raised.[30]

5.38      Similarly, the changes to the cooperation provisions would ensure that the TIO can require members other than the RSP against whom the complaint is made to cooperate with the TIO's decisions and recommendations, in cases where the TIO considers the other member needs to take action to resolve a complaint.[31]

Committee view

Timeframes for complaints resolution and role of the TIO

5.39      The committee is particularly concerned at the length of time taken to resolve some complaints and get NBN services working properly, especially where this delay has a monetary impact on small businesses or presents a health and safety risk for households. All parties involved, including nbn, RSPs and the TIO, must improve their focus on resolving issues as quickly as possible.

5.40      The committee notes that the Telecommunications Consumer Protection Code, an enforceable code administered by the ACMA, does not currently specifically require consumers to be made aware of the TIO scheme when they lodge an internal complaint with their RSP.[32] The committee considers that bringing this information to customers' attention at the time of lodging a complaint with their RSP will ensure that RSPs do their utmost to resolve complaints speedily.

Recommendation 14

5.41      The committee recommends that the Telecommunications Consumer Protection Code be amended to require that customers lodging a complaint with their retail service provider are specifically made aware of external dispute resolution options including the Telecommunications Industry Ombudsman at the time they initially lodge the complaint.

Role of the TIO in resolving disputes

5.42      The committee agrees with the TIO's stated view that is should be given the authority to require all relevant parties in the supply chain to cooperate with the TIO and provide information to the TIO in order to resolve customer complaints.

5.43      The committee agrees further, that the TIO should be able to require representatives from nbn, RSPs and any other relevant parties to meet together or otherwise cooperate in order to resolve a customer complaint, in cases where the TIO deems this to be necessary. This position appears to be broadly supported by the ACMA.

5.44      On the question of whether nbn should be fully subject to the TIO scheme, the committee considers that there is no compelling reason why nbn should not be subject to the scheme in cases where it can clearly be identified as the party at fault for a customer complaint. While in many cases it is not possible to attribute fault in this way, in the minority of cases where this attribution is more straightforward, the TIO should have the ability to register complaints directly against nbn, with nbn then responsible for paying the fees associated with that complaint.

5.45      The committee notes the current independent review of the TIO now taking place, and notes further the proposed changes to the TIO's Terms of Reference released in August 2017. Any changes implemented to the TIO's Terms of Reference and operations must specifically ensure that it has the ability to require all relevant parties to meet in order to conciliate and resolve complaints, where the TIO deems this to be necessary.

Recommendation 15

5.46      The committee recommends that the Telecommunications Industry Ombudsman be empowered to compel any relevant parties to a complaint to meet together or otherwise cooperate in order to facilitate the resolution of that complaint within a set reasonable timeframe.

5.47      The committee notes that there are significant inadequacies in resolving customer complaints, notably lack of direct access with nbn and a gap in the knowledge of available avenues for complaint and dispute resolution. Noting these issues cross wholesale and retail providers there is a need for a single agency to provide this information to ensure uniformity and consistency of message and advice.

Recommendation 16

5.48      The committee recommends that the Australian Government direct nbn to clearly identify the complaint handling process for consumers, including: complaint resolution processes and timeframes, and internal and external complaint escalation processes. This information must be provided by nbn in a way that meets Australian Government accessibility guidelines.

Misleading information provided to customers and consumer education

5.49      A key theme emerging in evidence to the committee was the need for better information to be provided to customers at every stage of interaction with the NBN. Specific issues examined included the information provided by RSPs in their marketing and signup processes, as well as what general information about the performance of NBN products is available to promote consumer choice.

Information provided to consumers in marketing materials and at the point of sale

5.50      Several proposals were raised with the committee that would seek to prevent misleading information being presented to consumers by RSPs, in marketing in their NBN products and during the signup process.

ACCC principles on broadband speeds marketing and related issues

5.51      As noted in Chapter 1, in February 2017 the ACCC released a set of six principles to guide RSPs in informing consumers of the speeds that they typically deliver on their broadband plans. The principles are as follows:

1. Consumers should be provided with accurate information about typical busy period speeds that the average consumer on a broadband plan can expect to receive.
2. Wholesale network speeds or theoretical speeds taken from technical specifications should not be advertised without reference to typical busy period speeds.
3. Information about the performance of promoted applications should be accurate and sufficiently prominent.
4. Factors known to affect service performance should be disclosed to consumers.
5. Performance information should be presented in a manner that is easily comparable by consumers, for example by adopting standard descriptive terms that can be readily understood and recognised.
6. RSPs should have systems in place to diagnose and resolve broadband speed issues.[33]

5.52      The ACCC's rationale for issuing these principles is stated in its consultation outcomes report:

The ACCC is issuing these principles as consumers have limited information and support in identifying broadband plans that meet their speed requirements. This is raising consumer search costs, inhibiting competition and feeding into an increasing level of consumer complaint.

In this regard, over 80 per cent of consumers that participated in the ACCC consultation stated it is difficult to ascertain and compare the speeds available across RSPs and plans, and that RSPs could assist them by providing readily-comparable information about the speeds they typically deliver.[34]

5.53      At the committee's Canberra public hearing in March 2017, officials of the ACCC noted that the principles are to be adhered to on an 'opt-in' basis by RSPs, while noting that the ACCC would take into account a provider's compliance with the principles in the event that complaints are raised against that provider.[35]

5.54      When questioned whether these guidelines should be binding on RSPs, an ACCC representative stated that its approach is to watch the industry's response to the principles and then consider whether enforcement mechanisms are necessary:

[W]e have said to the industry: 'You always ask us for guidance. We've given you guidance. We've given you principles. We've given you an opportunity to contribute to those principles. We'll give you guidance, and then we can make a determination as to in what way we make that guidance stick.' Whether that is enforceability for a code or another mechanism we will see, but I want to encourage them, at the moment, to engage in this process, and premature discussions around enforceability may not do that.[36]

5.55      Ms Clare O'Reilly of the ACCC noted that if necessary, the principles could ultimately be incorporated into the Telecommunications Consumer Protections Code (TCP Code), which is an enforceable code administered by the ACMA:

The industry has signed up to a code which covers consumer protection matters, and one of the requirements of that code is that an RSP has to provide a customer information statement at the time of purchase or at the time that a consumer is looking to purchase a particular service. That customer information statement has to be consistent across all industries so you are comparing apples with apples, and it includes such things as price and the central elements of the service that is being offered. The TCP Code is up for review this year and, although it is under the Australian Communications and Media Authority, which is our fellow regulator, the ACCC obviously has an interest in how that code is developed and in making sure that it includes things that have changed since the last code review.

We understand that NBN matters are to be included in that code. They are not at the moment but they will be... [O]ne of the things we would be looking for is that the principles we have announced are incorporated in some way in that code. That code is enforceable, and I suppose that is the advantage: it is proactive; it tells RSPs about the standards and behaviours that are expected. With the [Australian Consumer Law] we have to wait for a problem to arise before we can take action.[37]

5.56      Representatives from the ACMA confirmed for the committee that the TCP Code is being reviewed in the second half of 2017.[38] Ms Jennifer McNeill, General Manager Content Consumer and Citizen Division at the ACMA, told the committee that the review may lead to changes in the TCP Code to address NBN‑specific issues:

We have been reflecting very carefully on whether [the TCP Code] is specific enough to deal with the NBN issues that consumers are confronting. As a regulator, it's generally, in our view, preferable to have an approach which is focused on objectives and delivering outcomes than necessarily looking at technologies or particular incidents or events such as the rollout, which will have a limited duration. If we can put in place lasting and relevant protections that apply, irrespective of the technology, irrespective of how the NBN is delivered, then that is obviously a better thing to do.[39]

5.57      When asked about the recent guidance issued by the ACCC, an official from the Department stated that it will be very useful in terms of helping the industry respond to the current issues being faced, and that the Department's expectation is that the guidance will be adhered to by the industry.[40]

Further ACCC guidance released in August 2017

5.58      On 21 August 2017, the ACCC released detailed industry guidance on implementing its six principles concerning the marketing of broadband speeds. It outlined four key imperatives for RSPs, which are that RSPs should:

• indicate, in their plan descriptions and when marketing broadband plans that they supply over the NBN, the speeds at which the plans typically operate during the busy evening period;
• in order to assist consumers to readily compare plans, adopt a standardised labelling system (basic evening speed, standard evening speed, standard plus evening speed and premium evening speed) that indicates a minimum 'typical busy period speed' for the plan;
• take steps to provide remedies to those customers that cannot obtain the speeds at which their selected plan typically operates due to their particular network connection. This may include taking steps to deliver the speeds promised under the plan, providing billing refunds and reductions, supplying a more appropriate plan and/or offering to those customers the option to exit the contract without penalty; and
• for services supplied over FTTB and FTTN connections, where there is clear potential for some consumers to not receive typical plan speeds, RSPs should include clear and prominent disclosure in product descriptions and marketing, and give point of sale or post sale information and assistance to affected customers.[41]

5.59      The ACCC noted that its guidance would be reviewed in 12 months to ascertain whether it has been effective in addressing consumer concerns.[42] It stated:

The ACCC recognises this is a voluntary and best practice guide. However, given the significant consumer detriment currently being reported in relation to these issues, the ACCC encourages RSPs to immediately implement measures in accordance with this guide, save for those elements of the guide that are informed by network, which testing may require up to 3 months to implement.[43]

Existing ACMA determination on provision of information to FTTP customers

5.60      ACCAN noted in its submission that the ACMA made a statutory determination in 2014 requiring RSPs to discuss particular information with customers signing up to a FTTP service on the NBN, including information around how the customer uses telecommunications services and their options in case of medical needs and power outages.[44] ACCAN argued that a new determination is required to ensure that RSPs are appropriately discussing matters with consumers regardless of which NBN technology they are being connected to:  

As consumers need to order services through an RSP, it is right that responsibility is on the RSP to inform consumers and ensure they understand. A code is needed, as RSPs may not wish to do this themselves, as it may put consumers off purchasing services from them. Requiring RSPs to gain informed consent across all technologies would ensure consumers receive consistent advice and can make informed decisions about their services. Therefore we believe that a determination should be made that requires RSPs to gain informed consent on all services switching to nbn.[45]

Committee view

5.61      The committee considers that improving the quality, clarity and timeliness of information provided to consumers about NBN products is critical to enhancing the overall consumer experience.

5.62      The committee believes the principles released by the ACCC in February 2017 concerning the marketing of broadband speeds, and the extensive industry guidance supporting these principles released in August 2017 have the potential to improve selling practices in the industry. On their own they are not sufficient to deal with the problems the committee has identified. These principles represent voluntary, best practice guidance, and are not enforceable. Mandated standards are required to ensure all relevant information is disclosed to consumers.

5.63      The committee notes the ACMA's current review of the TCP Code, and considers that a revised TCP Code should incorporate the broadband speed marketing principles released by the ACCC together with the matters identified in this report. This should include specific requirements to ensure that critical information about the expected speed of services is provided to customers before and at the point of sale.

5.64      In particular, the NBN must provide information about actual attainable line speed to RSPs on a per premises basis. RSPs must be required to provide information to the consumer about the actual attainable line speed at their specific address, both before customers sign up to a service, and by confirming this information once the service has commenced.

5.65      The committee also notes ACCAN's suggestion that an additional ACMA determination should be made to ensure that relevant issues (not just relating to performance speeds) are disclosed to customers prior to a service being purchased, across all NBN technology types. The committee agrees that relevant disclosure requirements, currently only applicable to FTTP services, need to be extended to all NBN services, and that the ACMA should investigate whether this would best be accomplished through a revised statutory determination, or through updates to the TCP Code.

Recommendation 17

5.66      The committee recommends that the Australian Communications and Media Authority develop and introduce an updated Telecommunications Consumer Protections Code that specifically addresses issues raised in relation to customer experiences with NBN services. This should include mandatory, enforceable standards to regulate the marketing of broadband speeds, in line with the recent principles and industry guidance released by the Australian Competition and Consumer Commission. The updated instrument must ensure that end users have rights and accessible procedures to enforce those rights.

Recommendation 18

5.67      The committee recommends that the ACMA consider introducing an updated statutory determination, applicable to all NBN technology types, to require retail service providers to inform customers of any critical service issues and line impairments to ensure the customer has understood these issues, prior to a service commencing.

Broadband Performance Monitoring and Reporting Program

5.68      On 7 April 2017 the Minister for Communications, Senator the Hon. Mitch Fifield, announced that the ACCC would be implementing a Broadband Performance Monitoring and Reporting (BPMR) program for fixed-line NBN broadband services. The announcement by the Minister stated:

The BPMR program will enable consumers to compare speeds delivered in peak periods via independent reporting of broadband speeds.

Performance information is a key factor for consumers when purchasing plans from a retail service provider. The Government acknowledges that this will be vital as demand for data grows.

By collecting and publishing information about the speed and reliability of broadband packages, consumers will be better placed to choose a plan that is right for them. It will also encourage retailers to compete on the quality of their broadband plans.[46]

5.69      The announcement noted that the program was being introduced following a successful pilot program in 2015, and is modelled on similar successful schemes in the UK and the US. It stated that the ACCC will implement the scheme by sourcing performance data from around 4,000 volunteer customers of retail service providers across the country, and that $7 million would be provided to the ACCC over four years from 1 July 2017 to implement the program.[47]

The BPRM program

5.70      At the committee's public hearing in Melbourne on 19 April 2017, the committee discussed the details of BPMR program with representatives from the ACCC. Mr Sean Riordan, General Manager, Industry Structure and Compliance, ACCC, explained how the program would operate:

In very broad terms, a volunteer panel is called for. Those volunteers are issued with a testing device, which they connect to the modem in their house. The modem is programmed to generate test signals, which go to a test server. It does that in a very systematic and programmed manner, so that at the end of a particular period we have recorded how well the broadband connection has operated—that is, the speed at which test communications have been conveyed across the connection and other characteristics like how long the return path has taken for the communication to go there and back.[48]

5.71      In terms of the reports for the BPMR program, the committee was informed:

At the end of [the reporting] period you can then aggregate up the results and get a view as to what the typical performance was for the volunteers that were on, say, the Telstra plans, the Optus plans, the TPG plans, the various focused brands and other key entrants that may come into the market and take up a significant share of the services. Then that information can be presented back to the consumers through a statistical model to show that, in general terms, if you were on that particular plan in the last quarter, you could have reasonably expected to have received this level of performance. The consumers can then make a decision as to whether they want to continue to pay for the top speed service, if that is what they originally selected, or whether they want to migrate down to a more reasonably-priced service if they do not think they are getting value out of that higher-priced service. Or they may shop around the next time their contract is up and think, 'Here's a service provider that looks to have been doing better in their plans in delivering the speeds to the consumer, so I'll choose that particular service provider next time.'[49]

5.72      In terms of the frequency and nature of reports for the BPMR program, Mr Riordan told the committee:

What is envisaged is a quarterly snapshot report, which would give a view as to the typical performance of the key retail plans that are in the market over the NBN. Our [ACCC's] planning to date has focused on the mass market of NBN retail broadband plans. We have been looking at the fixed line technologies, which make up the bulk of those connections. The information...will be collated specifically to the retail broadband plan, so you might see statistics or information relevant to, say, the Telstra 25/5 plan, or the Optus or TPG plan over the specific speed tier so that the consumer will be given a snapshot of how that service was performing during the quarter.[50]

5.73      Further, in terms of publication and access to the reports, the committee was informed:

You could expect that that snapshot would be placed on the ACCC's website and you could expect, particularly with the first number of releases of that, that there would be an appropriate measure released to ensure that people were aware of its existence.[51]

5.74      At the time of the committee's hearing in April, ACCC were preparing documentation to approach the market:

We anticipate the end of May, early June being the time that we will formally commence that tender process. We will follow a standard government procurement process for a contract of that size so it will meet the relevant publication requirements and the minimum time frames that are required to allow people to submit their bids. And then we will go through the government's framework to make sure that a fair process and value for money considerations are brought to bear in awarding that contract.[52]

5.75      ACCC anticipated that from the time of the announcement in April, it would take three to four months to settle terms with the testing provider:

From that time, it would just be a matter of how quickly the testing provider could mobilise and issue the testing devices to the volunteers. At the same time as approaching the market for the testing service provider, we are also going to approach the market of volunteers to come forward and nominate, so that we are quickly in a position to filter out which of those applicants are suitable for appointment to the testing panel, so that the devices can be issued directly to them at that time.[53]

5.76      The request for tender for the testing services was published on AusTender on 30 May 2017.[54] In June 2017 the ACCC called for volunteers for the BPMR program.[55]

Stakeholder views on the BPMR

5.77      ACCAN expressed support for the introduction of a broadband performance monitoring and reporting program. It advocated, however, that the program be sufficiently resourced to monitor all NBN technologies rather than just fixed line services.[56]

5.78      The Communications Alliance took a different view, however. Whilst stating that the program could be potentially useful in providing high‑level transparency about the performance of different RSPs, the Communications Alliance raised a number of issues in relation to its implementation:

This project was originally envisaged as something that would provide consumers with comparative information about the performance of RSPs in a given location. So, if I was moving cities or suburbs, I would be able to compare who was the best performing or most suitable ISP for me in that area before signing a contract with them. The project cannot deliver that. When you break down the number of probes that the ACCC proposes to have in place and you divide that by the number of service providers it proposes to monitor—the number of products and the number of speed tiers—if you do the maths on all of that, you can end up with the given RSP having only two points of data measurement in a state for a given technology for a given speed tier. So the chances of it being able to be used for comparative data in that way are virtually nil.

There are a range of other concerns that have been raised about the program by industry. One of those was the fear that it could create an anticompetitive effect, in the sense that a relatively small number of service providers will be measured by the program and there will inevitably be a fair degree of public focus on those results and how they would look. Service providers who are likely to be outside the program have expressed concern that the limelight will focus on those inside it, and whoever looks good out of those results will tend to draw customers away from those who might be performing just as well but are not inside the program.[57]

Committee view

5.79      The committee welcomes the introduction of the Broadband Performance Monitoring and Reporting Program, but notes that it was successfully trialled in 2015, and it's likely that a number of problems with the NBN rollout could have been avoided or identified sooner if the BPMR program had been implemented earlier. The BPMR program will provide consumers with valuable information when considering which retail service provider and service plan to sign up for on the NBN. The committee will continue to examine the implementation of the program in the year ahead.

5.80      The BPMR program will work best in combination with the requirement that nbn disclose the infrastructure speed capacity of each connection, and with effective regulation that requires RSPs to disclose their peak/congested speeds.

General consumer education issues

5.81      The committee heard that the level of consumer education and awareness in relation to the NBN and broadband issues generally needs to be improved to ensure that the benefits of the NBN are realised.[58]

5.82      Various resources are already available to the public in relation to the NBN and broadband services. For example, the Communications Alliance drew the committee's attention to an online broadband education package available on its website, designed to help consumers understand the factors that influence their broadband, and help consumers to optimise the performance of the service they receive.[59] ACCAN also provided the committee with copies of consumer information guides it provides in relation to broadband services.[60]

5.83      nbn has recently launched a new national media campaign aimed at raising awareness about what Australians need to do to before signing-up to retail services over the network and how to get the best out of their broadband service.[61] It has also introduced a consumer guide to the NBN network, nbn's guide to Australia's new broadband, which is available prominently on the nbn website homepage.[62]

5.84      Ms Teresa Corbin from ACCAN argued that it is important that consumers are receiving consistent information about these issues in a format that is easily consumed:

I think that no one area should be responsible for all of the information provision, but what would be very useful is uniformity in the messaging that gets out there because, at the moment, that is a real problem... [W]hilst ACCAN plays a role in providing information, we cannot do it on our own. It is a question of testing things to make sure it is simple enough so that consumers will take the time to read it. It is not that they will not understand it; it is more that they feel attracted to give the time to it, because people are very time poor and while they do not necessarily not want to know, they just do not have the time to give to it.[63]

5.85      ACCAN recommended that to aid with general consumer awareness and education, a grants program should be established for independent digital technical support and capacity building.[64]

A role for independent local advisors on NBN consumer issues

5.86      At the public hearing in Perth, the committee heard from Mr Michael Hendry, the South West Independent National Broadband Network Adviser for Regional Development Australia-South West. Mr Hendry explained to the committee the context for the creation of his role:

The creation of this advisory position came from discussions between the South West Development Commission, Regional Development Australia-South West and local business organisations. During the early part of the NBN rollout in the South West, it was noted that some retail service providers were giving advice that was either inaccurate or incomplete. After initial discussions, it was agreed that Regional Development Australia would manage a program to implement the South West independent NBN advisor role for a period of 18 months, commencing in August 2016...The NBN advisor position was created as a partnership between the South West Development Commission, Regional Development Australia-South West, NBN Co, Business South West and the South West Chamber of Commerce and Industry.

The purpose is to provide independent, impartial and accurate advice on what needs to be considered when transitioning to the NBN, primarily targeting the small business sector, not-for-profit organisations and the regional community. Given that many of these people and organisations are generally time-poor and not tech savvy, this program has provided a much needed point of contact for all NBN related matters. It has been about providing people with the right information so that they can make the best decisions for their own circumstances.[65]

5.87      Mr Hendry stated that as the NBN adviser, he is responsible for planning, coordinating and delivering information to all community segments affected by the NBN:

To this end, I have consulted with many other like-minded groups, such as ACCAN, BIRRR Aus, the ACCC, the Telecommunications Industry Ombudsman and RSPs to ensure an accurate and consistent message....I've developed a four-page information brochure, which I've provided, to assist people in asking their provider the right questions. I've planned, organised and delivered over 100 public presentations to more than 2,500 participants in most towns of the South West, both business and consumer. I've provided advice to consumers by phone, email and in person. I've also undertaken numerous cold-calls on local South West business owners; maintained an NBN advice website with useful information, brochures and links; participated in regular Q&A on local ABC talkback radio; and drafted timely press releases to local media on relevant issues.[66]

5.88      At subsequent hearings, the committee sought the view of witnesses as to whether there may be benefit in having regional independent advisors. At the Launceston public hearing, Mr Damien Ivereigh, Chief Executive Office, Launtel agreed that such a person may be of great assistance, particularly in relation to technical matters.[67] At the public hearing in Burnie, Mr Rodney Greene, Director, Community and Economic Development, Burnie City Council, was uncertain that such an independent adviser would be helpful, noting that people were already overwhelmed by the number of different companies they had to deal with:

Of course, that allows then for people to blame one another. Whether that would be resolved by having a key person who can go and be a mediator between all of these different groups, I'm not sure. It seems that, when you're trying to give the perception of efficient service delivery but you have all these different people and you're on the phone to different companies and it takes days between when you ask for a service to be connected and when it's finally delivered or when a problem is identified it takes a while to work out who's actually responsible to fix it, that's where you get some of those service concerns.[68]

5.89      At the Central Coast hearing, Mr David Abrahams, President, Central Coast Start IT, an industry group promoting telecommunications investment, noted that his group had already made a similar suggestion to nbn senior managers:

Another thing that we would like to specifically recommend, as we have directly to NBN Co senior managers, is the instigation of a regional independent issues agent to take the pressure off the local members and senators and the flood of complaints and other issues that come through the door. You could refer them to an independent issues agent that would report directly to the NBN Co. It would summarise those reports to the local members and the parliamentary committees so that we create some sort of healthy tension there and alleviate some of the workload that must be inside these parliamentary offices. It must be enormous in this regard.[69]

Committee view

5.90      The committee notes the work being done by nbn and other bodies including ACCAN and the Communications Alliance in order to enhance the level of consumer awareness and education about the NBN, but on current evidence these efforts have not been sufficient.

5.91      It is clear that this is an area which should be improved considerably. As such, the Australian Government should consider providing additional funding to assist raising the level of consumer education about the NBN. This could consist of grant funding to aid digital technical support and capacity building, and could also provide funding towards regional initiatives such as the introduction of local NBN advisory roles.

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