NBN may have to compensate customers for poor service under Labor proposal

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A new proposal from the Australian Labor Party would see NBN Co beholden to a wholesale service contract, requiring it to meet certain performance standards or else face fines and penalties.

This would involve reimbursing customers that experienced significant delays in installing initial connections or repairing faults in existing ones, as well as those that have been inconvenienced by NBN Co missing appointments.

The specific details surrounding the extent of the penalties and the exact nature of what entails reimbursement will be left to the ACCC to decide in conjunction with NBN Co and other stakeholders if the proposal goes ahead.

What Labor wants

“Our policy will make the NBN more accountable to your retailer, so they can be more accountable to you,” said Shadow Communications Minister, Michelle Rowland, in her office’s latest video announcing the proposed NBN Service Guarantee.

This video has been shared by Bill Shorten, who hopes that this guarantee would address “horror stories, like people taking time off work only for a technician not to show up, or an outage fault that isn’t fixed for days leaving a small business in the lurch”.

A parliamentary hearing in mid-2017 revealed that there was a total of 82,552 missed appointments related to the NBN in 2016, doubling the figure from the previous year, and that these were the cause of a record number of complaints to the Telecommunications Industry Ombudsman.

The public dissatisfaction hasn’t settled either, with an increase in NBN-related complaints of more than 200% over the last 6 months of 2017, 14,055 of which were regarding service quality, and 8,757 related to delays in services.

Nothing new

The proposal isn’t too far removed from a submission made by Telstra earlier in the year, which accused NBN Co of penning “aspirational, non-binding targets” and requested there be stricter standards and a financial penalty put in place as a consequence of not meeting them.

This lead the current Australian Government to request that the ACCC not interfere with NBN Co’s current service standards until 2020, at which time “it may be appropriate for more stringent standards to apply from when NBN enters a steady-state”.

It’s important to note that Labor’s proposal is coming from a party in opposition and may not get the bipartisan support it needs to be enforced, but it does add to the growing list of proponents for a stricter set of regulations and accountability placed on the struggling NBN service.