iiNet blasts NBN Co over network fix times, compensation

ISP iiNet has lampooned NBN Co for setting the bar too low on restoration times for network faults and the circumstances in which it will compensate ISPs for outages.

ISPs worry that NBN faults will leave them out of pocket.

The Perth-based ISP, via its retained law firm Herbert Geer (pdf), is extensively critical of what it sees as an attempt by NBN Co to avoid issuing service credits or paying for outages that might otherwise attract financial penalties under existing customer service guarantee (CSG) legislation.

iiNet implored NBN Co to look to the industry for some direction on appropriate restoration times on fibre networks, rather than simply copy the restoration times from the CSG, which relate primarily to Telstra's copper network.

"There is no precedent service level agreement standard for large-scale, government-imposed fibre network monopolies," the ISP stated.

"iiNet believes that service level agreements based on legacy copper networks do not provide an appropriate benchmark which should govern NBN Co's service levels.

"iiNet believes that a more appropriate benchmark is the service level agreements offered by providers of fibre networks that provide services comparable to NBN Co's."

iiNet said it was "aware of an offering in the current market place that provides better fault rectification service levels than those offered by NBN Co".

"This fibre provider offers a four hour fault restoration target for critical fault restorations," the ISP stated.

"By comparison, the best fault rectification target that NBN Co offers is six hours but this only applies in respect of multiple user faults — single end user faults have a fault restoration target that can be as long as 39 hours".

In its standard access undertaking (SAU - pdf), NBN Co divides faults into two groups — "end user", which refers to a single service, and "network", which impacts "multiple ordered products".

iiNet's 39-hour calculation appears based on the restoration time that NBN Co has committed to for remote areas. In urban areas, NBN Co said it would endeavour to fix faults affecting single users by "3.00pm next Business day", and a day later for faults in rural areas.

NBN Co typically gives itself an hour or less to acknowledge reports of a problem.

Compensation carve-outs

iiNet is critical of what it sees as "extensive carve-outs" in the definition of end user and network faults that might prevent NBN Co from issuing service credits with respect to an outage.

"The majority of service levels in the [SAU] Service Level Terms do not lead to any consequences if NBN Co fails to meet them," the ISP wrote.

iiNet also took issue with a number of SAU clauses it says put the onus on the service provider to keep records and forecasts that might affect how much — if any — compensation is payable.

"Whether or not an access seeker maintains records is irrelevant to the ability of NBN Co to meet its service level obligations," it said.

"As the access provider, NBN Co should maintain appropriate records to meet its service level obligations and should not be reliant on any records from the access seeker.

"iiNet [also] submits that making service level rebates dependent on forecasting adds an unnecessary layer of complexity and gives NBN Co a further unjustified opportunity to avoid having to pay connection rebates."

Such terms had the potential to discriminate against smaller access seekers with less money to invest in systems to perform such work, iiNet said.

CSG exclusions skirt federal law?

iiNet is also concerned about financial recourse in the event of an outage when a customer's existing copper connection was swapped over to fibre.

Some concerns relate to the potentially adverse impacts of 'pull through' — a last resort method of trading copper or HFC for fibre that could result in outages while the migration occurs.

iiNet is concerned about who would be liable to pay damages in the event an NBN migration-related outage meant CSG rules could not be met. The SAU in its current form explicitly makes NBN Co not liable.

The CSG sets maximum timeframes for repairing faults and payouts that apply in circumstances where restoration occurs outside of those time frames, which range from one to three working days.

"NBN Co should have an obligation to provide CSG compensation in circumstances where the NBN Co standard telephone service is not connected within CSG timeframes and the access seeker is required to pay the end customer CSG compensation," iiNet said.

iiNet also attacked a second exemption to NBN Co paying CSG fees for wireless customers.

"iiNet believes that it is unreasonable for NBN Co not to provide CSG compensation in respect of NBN Co's Wireless Network," the ISP stated.

"iiNet believes that such an exclusion is unjustified in circumstances where NBN Co's network is used to provide a standard telephone service that is subject to CSG obligations.

"iiNet is concerned that a Government owned entity is seeking to avoid federal legislation designed to protect consumers."

NBN Co's response

An NBN Co spokeswoman referred questions by iTnews to SAU supporting submissions made in September last year.

"NBN Co will pay a customer [ISP] CSG compensation if the customer contravenes a CSG performance standard and NBN Co has wholly or partly contributed to that contravention due to an act or omission by NBN Co, including failing to meet a metric, as specified in the Service Levels Schedule," the company said at the time. (pdf)

"However, customers must take all actions reasonably available to them to mitigate liability to pay Primary Damages under the CSG Standard.

"This may include requesting an end user to waive its rights to the CSG Standard or ordering the access components that are to be used as a downstream CSG service as an accelerated connection".

NBN Co declined to comment specifically on the appropriateness of the fibre service levels, and its CSG exemption for wireless customers.

iiNet said in its submission that it saw the waiver requirement as "unreasonably draconian" and running contrary to the long-term interests of end users.