NBN Co will have to pay retail service providers $25 every time they miss an appointment, make a late connection or have to fix a service fault.
The network builder will also have to “simplify the process for RSPs to receive rebates and remove some conditions for claiming rebates”, according to an enforceable undertaking agreed with the Australian Competition and Consumer Commission (ACCC) today.
The undertaking represents the first movement in months stemming from the ACCC’s NBN wholesale service standards inquiry.
Having talked tough about pulling NBN Co into line earlier this year, the ACCC has been quiet about the progress of its inquiry since.
Service level agreements (SLAs) and the difficulty claiming financial compensation from NBN Co when those SLAs were missed had been a bugbear of many RSPs.
Under the existing wholesale broadband agreement with RSPs, rebates were highly conditional, with the $25 flat rate on some missed SLAs affected by complex multipliers and the application of percentages.
Now, NBN Co will pay a $25 rebate for missed appointments "automatically ... without RSPs needing to claim," the network operator said in a statement.
It will also automatically pay "the existing $25 rebate for missed activation and fault repair timeframes to NBN Co’s wholesale customers in 100 percent of instances (up from our current 90 percent threshold), subject to standard exclusions."
NBN Co now has three months to amend its standard wholesale arrangement to reflect the undertaking to the ACCC.
One of the conditions for NBN Co paying out more rebates is that some sort of benefit flow through to the end customer; that is, the rebate can’t just be added to the RSP’s bottom line.
"Under the undertaking given to the ACCC, NBN Co will require the RSPs to continue to take reasonable steps to ensure customers receive a benefit from the improved rebates the service providers will receive from NBN Co,” ACCC chairman Rod Sims said in a statement.
“This could mean customers could receive rebates from RSPs or other benefits, such as providing a substitute service while a fault is being fixed.”
This was repeated in a statement from NBN Co: "[we] anticipate that retail service providers will take reasonable steps to ensure that affected homes and businesses receive (in monetary or other form) a fair value benefit of these rebates."
Not per day or punitive
Relatively unconditional rebates will likely be welcomed by RSPs though they fall well short of proposals aired in recent months.
Telstra, for example, had asked the ACCC to consider structuring the rebates whereby the $25 was charged “per day for the first five business days of a service level miss, rising to $50 per day thereafter.”
Labor had also raised the prospect of punitive fines on NBN Co in recent months.
However, it is understood that the rebates agreed to today would come out of NBN Co's operating expenses and that impact had been factored into the most recent corporate plan.
That NBN Co will have to pay out more rebates means that its lengthy submission to the ACCC was largely ignored.
The company saw “no grounds” for intervention and repeatedly alleged that RSPs were simply trying to “game” the system.
However, the ACCC inquiry came about because RSPs alleged the terms of the latest wholesale broadband agreement had been pushed through with little negotiation.
Fixed wireless data
NBN Co has also committed “to improve its reporting to RSPs so they can more easily track NBN Co’s performance and better support consumers in congested fixed wireless cells.”
“NBN Co will also add information about the level of congestion in its fixed wireless network to the customer experience dashboard that it publishes monthly,” the ACCC said.
Sims said the wholesale service standards inquiry is continuing with a further consultation paper to be released "soon".