Consumer watchdog slams NBN Co with formal warning
Australia's consumer watchdog has served the company responsible for designing and operating the NBN a formal warning for discriminating between retail internet providers.
The Australian Competition and Consumer Commission (ACCC) this morning served NBN Co the court-enforceable undertaking, which includes a commitment by the organisation to ensure their conduct is not repeated.
In short, the ACCC found that NBN Co was offering different commercial contracts to different retail service providers – such as Telstra or TPG – as sweeteners for providing high-speed business-grade internet.
In one example, NBN Co provided a single retail service provider with indicative pricing information for its ethernet service months before giving the same information to the rest of the market.
An ACCC investigation found that this practice of favouring one provider over another did not comply with non-discrimination obligations.
"The ACCC has concluded that NBN Co failed to comply with its non-discrimination obligations on a number of fronts," ACCC Chair Rod Sims said.
"These legal obligations were enacted to ensure that NBN Co does not distort competition in the market for retail NBN services, such as by favouring larger RSPs."
Mr Sims said at this point the ACCC did not possess evidence that NBN Co's practices led to market harm, hence the formal warning instead of more criminal proceedings.
"Market feedback suggests that NBN Co's entry into the wholesale enterprise market has increased competition, particularly in areas where Telstra is the only other fixed-line infrastructure provider," Mr Sims said.
"Despite this, the ACCC is satisfied that NBN Co's conduct amounted to a serious breach of its non-discrimination obligations.
"The undertaking we have accepted from NBN Co is intended to ensure that all access seekers can compete on an equal footing going forward."
In a statement NBN Co says the ACCC's involvement has been a valuable process.
"NBN Co welcomes the clarity and certainty provided by the undertaking agreed with the ACCC. The undertaking helps give certainty to both NBN Co and the market about the way we build our network and how Australian businesses can benefit," said an NBN Co spokesperson.
"Providing competitive offerings to help meet the needs of business has always been part of NBN Co's intent. The outcomes that we have agreed with the ACCC provide a transparent platform which confirms NBN Co's crucial role in the business segment. In fact, we're now even better placed to deliver value for the industry and for business customers.
"For a maturing business, this has been a very valuable process, to work constructively with the regulator to firm up processes that not only help ensure compliance but provide simplicity, flexibility and better access to commercial arrangements for the benefit of industry and the business market.
"Many of these improved processes are now in place and communicated to our retail partners, and we look forward to implementing the remaining few obligations as outlined in the undertaking and working together with the industry to provide great customer experience to businesses."
This is the first time the ACCC has issued a formal warning for a contravention of the service provider rules.
The contraventions described in the formal warning relate only to the conduct of NBN Co and do not apply to the RSPs referred to in the formal warning.
According to NBN Co, the high-speed internet network is on track to be completed by the 30th of June 2020 within budget of $51 billion.
By that date NBN Co estimated 11.5 million homes and businesses will be ready to access the network.