Large ISPs face $2m penalty over service guarantees

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Large ISPs face $2m penalty over service guarantees

Regulator yet to determine extent, use of fines.

Large internet service providers could face fines of up to $2 million if they do not meet performance benchmarks for customer connections, fault repair and appointments.

From October 1, providers with more than 100,000 services regulated by the Australian Communications and Media Authority's customer service guarantee (CSG) would be required to meet the set performance benchmarks 90 percent of the time.

The CSG timeframes stated that providers establish a customer connection in between two and 15 days, and repair a fault up to four days after it was reported, depending on location and complexity.

Affected customers could claim up to $48.40 a day depending on the length of waiting period and type of complaint.

Those performance targets were deemed by the ACMA not to have been met by many service providers.

"The CSG Standard is designed to protect consumers against poor customer service by setting timeframes to be met by service providers for the connection, fault repair, and keeping of appointments in relation to standard telephone services provided under the Customer Service Guarantee (CSG) Standard," Communications Minister Stephen Conroy said.

A legislative instrument, drafted in May, would allow the ACMA to decide whether to charge infringement penalties or undertake civil action against large service providers which did not meet the established benchmarks.

Infringement penalties would likely range between $6600 and $1.98 million, though the Department of Broadband was expected to publicly consult on the maximum penalty chargeable to service providers.

The regulator, too, was expected to begin consulting on which provisions would be deemed liable for the infringement notices.


The Australian Communications Consumer Action Network remained unconvinced any further powers to the regulator would change how often service providers met their performance benchmarks.

"These measures are only as useful as the real world enforcement practices of the regulator," the consumer group wrote in a submission to the Department of Broadband in May.

"Experience has shown that the prevailing co-regulatory structure commonly results in a 'wait and see' approach by the regulator. Historically the regulator rarely uses its powers to impose financial penalties."

Customers were able to waive their rights to the guarantee for some services, although the regulatory had continued consultation on potential changes to how these waivers would be delivered and ascertained by telcos.

Telstra to blame?

In separate submission to the department in May, both Optus and Primus argued their previous instances of failing to meet the established performance benchmarks came due to a lack of reporting from Telstra on network faults.

Although the legislative instrument restricted potential penalties to service providers with less than 100,000 guaranteed services, it did not appear to shed any fresh light on how the regulator would determine liability of either the wholesale carrier or the access seeker in failing to meet performance benchmarks.

"Retail service providers affected by this proposed instrument are at the mercy of the incumbent infrastructure owner to meet the performance guarantees," Primus wrote in its submission [pdf].

Concerns from the telcos appeared to rely largely on the provision of customer services over Telstra's unconditioned local loop product, used to provide ADSL and telephone services over the copper access network.

Though Primus claimed responsibility of the customer relationship, it forfeited capability to rectify any issue deemed to be at Telstra's end.

Optus [pdf] deemed the issue a point of "regulatory uncertainty" for the telco industry.

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