Vocus wants NBN Co's enterprise "direct sales" team shut down

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Vocus wants NBN Co's enterprise "direct sales" team shut down

Or alternatively to face Telstra-like structural separation.

Vocus wants to see NBN Co’s “industry engagement” team - which has tried to convince hundreds of Australia’s largest enterprise and government accounts to switch to NBN - disbanded or forcibly separated from the rest of the company.

The ASX-listed telco likened NBN Co’s industry engagement team to a “direct sales” organisation that is increasingly in “conflict” with retail service providers’ (RSPs’) own sales teams.

In the enterprise and government (E&G) market, NBN Co makes direct approaches to prospective customers and enters direct contracts to deploy fibre to customers’ sites. The customer must still contract separately with an RSP for internet service.

RSPs universally dislike NBN Co talking to and striking direct deals with E&G users. 

While NBN Co argues the deals cover only build work, RSPs say the agreements contain terms that limit how they can serve the customer.

In addition, different terms were offered to different RSPs and customers in the past. This led to NBN Co being formally warned by the Australian Competition and Consumer Commission (ACCC), but this does not appear to have dented the direct approaches.

Vocus has previously called for NBN Co’s statement of expectations to be rewritten in a way that provides NBN Co clear rules of engagement in the enterprise market.

However, in a parliamentary submission published Friday last week [pdf] - and in a sign that RSPs’ concerns on NBN Co's enterprise market behaviour continue to go unaddressed - Vocus took a much harder line.

“In the competitive enterprise market, NBN Co’s ‘industry engagement’ staff effectively operate as a direct sales team by engaging with end-users to sell NBN’s ‘build’ products (meaning the construction of new fibre),” Vocus said.

“NBN Co should not engage directly with end users to ensure it operates solely within its wholesale-only remit; to reduce end-user confusion and conflict between RSPs and NBN Co’s ‘industry engagement’ staff; and to ensure it does not gain an unfair advantage in the market due to its access to information about end user requirements. 

“Shutting down NBN Co’s direct sales function would be one avenue to prevent NBN Co from inappropriately discriminating between its wholesale customers.”

As part of its submission, Vocus raised new allegations that NBN Co’s wholesale arm is passing RSP-supplied information about “end user requirements” directly to the industry engagement team to inform their outreach and discussions.

“The issue of NBN Co being a retail competitor to its wholesale customers is compounded by the fact that NBN Co has access to RSPs’ information about end user requirements,” Vocus wrote.

“RSPs have limited legal protection from NBN Co sharing that information between its wholesale business and its direct sales staff - who can use that information to directly engage with end users in an effort to sell 100 percent NBN fibre builds.

“While NBN Co has recently sought to address this particular issue by implementing “information ringfencing protocols” following the ACCC’s formal warning, industry is still expected trust NBN Co to implement these internal governance controls without appropriate regulatory oversight.”

As iTnews reported in an investigation published last month, trust among parties in the E&G telecommunications market remains fractured, mainly because there are few obvious signs of change to NBN Co's business market behaviour following the formal warning. 

While its first choice is to see NBN Co’s industry engagement team axed altogether, Vocus said that “in the absence of a complete shutdown of NBN Co’s direct sales team, at a minimum NBN Co’s enterprise business should be subject to separation requirements with equivalent regulatory oversight to Telstra’s structural separation undertaking (SSU).”

“This should require NBN Co’s wholesale staff to work separately from its direct sales staff; and should include legally enforceable ‘protected information’ requirements,” Vocus wrote.

“Under Telstra’s SSU, ‘Telstra will not use or disclose protected information relating to a wholesale customer in a manner which would be likely to enable a retail business unit to gain or exploit an unfair commercial advantage over that wholesale customer in any market’.

“This same requirement should apply to NBN Co, at a minimum, to prevent NBN Co from exploiting RSP information to its own commercial advantage. 

“Additionally, in the absence of a shutdown of the direct sales team, NBN Co’s non-discrimination obligations should apply equally to its contracts with both RSPs and end users, which should be offered equivalent terms for enterprise fibre builds.”

Vocus also renewed its earlier call for the statement of expectations to be rewritten to specifically cover NBN Co’s E&G foray.

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