Opinion: The NBN must end the telco blame game

Does NBN Co have any incentive to be good to ISPs?

Can we be sure NBN Co will be a good wholesale provider if it operates without competition? David Havyatt investigates.

The build of a National Broadband Network presents a real opportunity to end the blame game between retail ISPs and their wholesale provider, which today tends to be Telstra.

But imagining a future in which NBN Co has no competition, it is worth asking whether the government-owned network operator will have much incentive to accept responsibility for complex problems impacting the customers. It will be just as easy to hang the retail ISP out to dry.

Last week iTnews reported that NBN Co’s wholesale agreements have a provision that NBN co customers “must not… criticise or attribute to NBN Co any fault or blame in connection with Customer Products.” 

Industry wholesale agreements have historically been clouded in secrecy, and we can’t know precisely whether the likes of Telstra, Optus and VHA include similar provisions.

But we do know what the competition watchdog considers an acceptable agreement.  In 2008 the ACCC published new model non-price terms and conditions for accessing declared services. 

These include provisions that reflect those of NBN Co.  Clause F.6, for example, stops either party from claiming to have a “special relationship” with the other.  Clause F.7 says that a party will not in communication with an end-user blame the other party for a fault or other circumstance.

There are good reasons for some of these provisions. Telstra, for example, has suffered at the hands of some less respectable resellers asserting that they were “part of Telstra”, or a “preferred supplier” when it wasn’t the case.  They also suffered from attempts to blame them for customer outcomes that really rested with the retail provider.

But there are plenty of occasions where an end-user is experiencing trouble due to a fault at the wholesale provider, and the retailer feels powerless to fix it. 

One good thing about the NBN is that retailers won’t have to worry about their wholesaler’s retail arm trying to use the event to win the customer over. 

But that said, there is no great incentive for NBN Co to be concerned about their customer’s customer.  It is not as if the retail provider will have anywhere else to go.

End-users don’t tend to understand the difficulty.  They assume that because there is a contract between retailer and wholesaler, their retail provider has recourse to law to sort out their problems.

For the retailer, this is where it gets messy.  Firstly, the idea of litigation ignores the practical reality of the size differential between the firms.  The wholesale provider can outlast the financial capacity of most retailers to litigate.

This unequal negotiating position was supposed to have been addressed by additional protections for the retailer within the “unconscionable conduct” provisions of the Australian Consumer Law.  But these are provisions more notable for the scarcity of their use than for their effectiveness.

In any case, the wholesale agreement probably has a dispute resolution clause like that in the ACCC model in section D.  But this is a time consuming a bureaucratic process and certainly does nothing to fix individual cases.

iTnews isn’t the first to note the potential for conflict.

When the Government announced its review of the Telecommunications Industry Ombudsman, Internode CEO Simon Hackett commented on the ISOC-AU discussion forum that the most pressing issue was for the TIO to be able to take up the cause of the service provider with their wholesale provider when real customer detriment was occurring. 

“Clearly in the NBN realm, with no other supplier to go to, even in a subset of geographic areas (today, sometimes, we can use 'not Telstra', but tomorrow we can never use 'not NBN'), it seems pretty important that ISP's aren't made to be 'piggy in the middle' for issues entirely outside of their control or cause,” Hackett noted.

“It would seem manifestly unfair to pin the ISP against the TIO's wall for any form of long running technical issue within the NBN realm (in establishing a connection, troubleshooting one, or getting one fixed rapidly enough),” he said. 

“Given that NBN is also going to be the path to the PSTN, this issue clearly intersects any notion of CSG's as well - will NBNCo provide a back to back guarantee on CSG voice line installation and repair timeframes? Or will it require ISPs to take one for the team, every single time NBNCo don't hit an install timeframe?”

The industry did spend time looking at an alternative dispute resolution scheme for retailer/wholesaler disputes under the banner “resolution@span”.  NBN Co’s GM of Customer Engagement Mathew Lobb was a champion of this when he was at Telstra.  This was, however, focused on the big ticket disputes over price terms and conditions.

Communications Alliance’s John Stanton says the issue of dispute resolution mechanisms between NBN Co and retail providers has been listed on the work program, but no activity is currently underway.

It’s important that none of the parties involved drop the ball on this issue. Australia’s telecommunications consumers aren’t just looking for faster speeds from the NBN.  They are looking for a new industry and an end to the blame game.

While there are plenty of other important issues to settle with the NBN, getting decent back-to-back complaint resolution mechanisms in place has to be one of them.

Have you had a bad customer service experience while providers play the “blame game”?