iiNet, Internode steer clear of NBN agreement

ISP iiNet and its subsidiary brands including Internode, Adam Internet and Westnet are refusing to sign the latest commercial service agreement with NBN Co, citing risk concerns.

The 'New No.2' isn't yet party to NBN Co's revised WBA.

Chief regulatory officer Steve Dalby told iTnews that the call had been made across iiNet and its brands not to become a signatory to the wholesale broadband agreement version two (WBA2), which comes into effect March 1, 2014.

NBN Co today touted Telstra and Optus as signatories to WBA2, along with 25 other retail service providers, but iiNet — and its brands — were conspicuously absent from the announcement.

"We've got a range of issues [with WBA2]," Dalby said. "Some of them are not as big as others".

iiNet remains primarily concerned with the level of responsibility that NBN Co is willing to accept with respect to the customer service guarantee (CSG).

The CSG enforces service levels for new fixed-line phone connections, fault rectification and the keeping of appointments. iiNet first raised its concerns in January 2013.

Failure to meet CSG obligations can result in a service provider being forced to compensate an end user whose service was not connected on time, and can also lead to fines levied by the Australian Communications and Media Authority. Telstra recently paid a record $510,000 fine for not meeting CSG benchmarks.

For iiNet, the issue is with who ultimately pays CSG compensation to the end user. The retail ISP must pick up the bill, but presently, if the end user's service is supplied over a resold Telstra line, Telstra pays.

"Where Telstra is the wholesale provider, they in effect underwrite CSG payments that are required," Dalby said. "They do the right thing. If we get hit with the CSG, we turn around to Telstra and they pay us".

Dalby said NBN Co, on the other hand, "refuse to accept liability for CSG" penalties incurred on connections that NBN Co supplies.

"They are missing a lot of appointments so I can understand why they don't want to wear CSG liability, but it's unreasonable to expect we will wear CSG liability and TIO [liability, if the complaint is escalated] on the basis that their performance causes those payments to be made," he said.

"NBN Co refuse to take responsibility for their performance."

Dalby is also concerned about the lack of regulatory recourse available to iiNet and its subsidiaries should it sign on to the WBA2.

An NBN Co spokesperson told iTnews the company is "working with industry to transition from the existing to the new Wholesale Broadband Agreement" but did not respond to iiNet's specific grievances.

Further clarification is being sought at the time of publication.

NBN Co said in a statement that it would spend 2014 working to "further develop" the WBA terms "in light of ongoing operational experience".

It touted the WBA2 agreement — which was more than two years in the making — as a triumph of engagement with the industry, and said the agreement offered access seekers "a range of enhancements ... as well as greater clarity and consistency".

iiNet and its subsidiary brands remain on the WBA1 agreement. iiNet is one of the largest retail service providers on the NBN.