NBN Co must pay TPG, Canberra VDSL2 users for disconnection notice bungle

NBN Co must compensate TPG and a subset of customers of TransACT’s VDSL2 network in Canberra that it mistakenly told would be disconnected from the internet if they did not switch to NBN.

The network builder made a court-enforceable undertaking [pdf] to the Australian Competition and Consumer Commission (ACCC) after sending over 20,000 households connected to TransACT’s VDSL2 network a final disconnection notice mid last year.

While most internet users in Australia must move from existing services to the NBN once the latter becomes available, there are exemptions in areas that are already served by certain types of fixed-line infrastructure.

The incident made headlines last year when the notices caused confusion for residents, who can remain on VDSL2 if they wish to.

It turns out many did want to stay, with an unknown number going to the NBN before terminating the service early - at a cost - to then revert to TransACT.

Under the enforceable undertaking, those customers can now claim back the early termination costs they incurred.

NBN Co has been instructed to set up a system that can be used to record instances where this occurred and to compensate those households.

TransACT was bought by iiNet in 2011 and is now part of TPG. The forced disconnections, unsurprisingly, "applied mostly to iiNet customers".

The enforceable undertaking states that NBN Co must compensate TPG directly for expenses it incurred trying to correct the bad notices and misinformation sown by NBN Co.

The amount payable to TPG is to be “no less than $20,000,” the undertaking states.

ACCC chair Rod Sims said it was “unacceptable for NBN Co to tell consumers on other broadband networks such as the TransACT Network that moving to the NBN is their only option, when that is just not correct”.

“Moving to the NBN is an important decision and it can be confusing,” he said.

“Consumers should be able to trust that NBN Co is providing them with accurate information.

“The ACCC will not hesitate to seek high penalties in court against NBN Co, and other telcos, if we see this type of conduct again.”

The ACCC said NBN Co had also committed “to establish safeguards against repeating this conduct.”

“This includes appropriately tailoring its disconnection communications in the footprint of competing networks that supply more than 1000 services and keeping a voluntary register on its website of competing networks that will continue to operate alongside the NBN”.

An NBN Co spokesperson confirmed it had "undertaken to reimburse affected ACT customers for the cost of ending their contract for NBN services early if they wish to switch back to receiving services from the TransACT VDSL2 Network".

It said the refund was conditional on customers moving from the TransACT VDSL2 network to the NBN prior to 10 August 2019, and then returning to the TransACT VDSL2 Network, and on the customer actually incurring fees for exiting an NBN contract early.