ACCC gets tough on Telcos

This week in Innovationaus.com the reasons behind the ACCC's targeted action to ensure that the Telcos provide consumers with improved information is discussed. There is a considerable lag occurring between changes to consumer expectations and the rate at which the Telcos react and it is timely that the ACCC has stepped in.

Read the full article below

The Australian Competition and Consumer Commission (ACCC) has ramped up pressure on the telecommunications industry in an effort to give consumers “better information about broadband speeds, to improve competition and consumer outcomes in the retail broadband market.”

Communications Alliance (CA), the peak telecommunications industry body, and the Australian Mobile Telecommunications Association (AMTA) positively responded to the ACCC’s discussion paper by suggesting that CA/AMTA should develop new guidelines for Retail Service Providers (RSP) on providing adequate information about broadband speed and performance expectations to consumers.

Arguing that the ACCC’s current restrictions placed on the industry were preventing transparent information being made available to consumers, CA CEO John Stanton stated that “the ACCC guidance also requires ISPs [RSPs] to take account of a wide range of factors when they wish to make any statement about the data transfer rates available to consumers using their services.

“Some of these factors – including the need to consider the numbers of users of a broadband service within a customer’s premises, as well as the nature of the modem-device connection (e.g. cable or Wi-Fi) – are unrealistic for ISPs [RSPs] to identify on a customer-specific basis, thus making it difficult or impossible to make any claim about data transfer rates,” he said.

However, the CA/AMTA submission did not go as far as supporting the collection of real-time performance data and making this information available to consumers.

On several occasions over the past couple of years CA/AMTA have argued vigorously that the cost of a performance monitoring and reporting program could not be justified, so the suggestion by CA/AMTA to develop new guidelines on how RSPs can provide adequate information about broadband speed and performance is a positive step in the right direction.

In a remarkably sanguine approach to a problem that is now nearly two decades in the making and showing no signs of abating due to the recalcitrant telecommunication industry, the ACCC states that it has “observed that broadband retail service providers (RSPs) have generally been slow to provide consumers with information that readily identifies the performance and speed characteristics of fixed broadband services and plans.”

To understand the extent of the problem being addressed by the ACCC, the Telecommunications Industry Ombudsman (TIO) statistics reported earlier this year show that 10,985 of the 31,297 new complaints made between January and March 2016 were internet related.

The top internet complaint issues were slow data speeds (2,159 issues), unusable services (2,125 issues) and connection delays (2,079 issues). The TIO reported that “the proportion of internet complaints has grown to 35 per cent, from 26 per cent at the same time last year.”

The ACCC consultation on broadband speed claims is not the first time in recent years that the ACCC has highlighted the failure by the telecommunications industry to address misleading claims about broadband speed and performance.

In September 2015, the ACCC successfully completed a project to gather information on how a broadband performance monitoring and reporting program might work in practice, and as part of this project the ACCC carried out a pilot broadband performance monitoring trial between March to May 2015.

The ACCC Chairman Rod Sims said that “the ACCC believes a broadband performance monitoring and reporting program would promote competition and consumer outcomes by providing transparency over the quality of broadband services.”

“As the National Broadband Network (NBN) rollout progresses, providing transparency over the performance of the monopoly network provider will be particularly important as retail service providers (RSPs) will be dependent on NBN Co for the underlying network capability,” he said.

“In this regard, visibility over any network-based performance issues would help identify whether any bottleneck issues in the network are attributable to RSPs or the network provider.”

“In addition, it is also important for consumers to have information about how different broadband products perform when choosing the option that’s best for them.”

The ACCC’s call for the Government to fund the broadband performance monitoring and reporting program fell on deaf ears in Canberra, and to some extent the reason why the Government does not want to fund the program will be the hard evidence that the program would provide about the lower reliability and performance of the copper based access network technologies introduced into the NBN in September 2013.

A ubiquitous fibre access network based on the pre-September 2013 NBN design would provide every consumer with uniform improved performance, reliability, and to a large extent, remove the variability in service reliability and performance due to different telecommunications infrastructure being used, electrical noise, rain and other factors.

In support of the ACCC’s actions, the Australian Communications Consumer Network (ACCAN) has increased the pressure being applied to the Government by identifying reliability, broadband performance and affordability as key telecommunications consumer priorities for 2016.

Communications Minister Mitch Fifield will be aware that the ACCC is not going to “let this one go” and will continue to ramp up the pressure on the telecommunications industry and government.

The potential for NBN cost blowouts, rollout delays and poor FTTN performance could harm the Coalition government’s chances at the next Federal Election, so it makes sense to look for a solution that either delays the implementation of broadband performance monitoring until after the next election, or limits consumer expectations whilst implementing limited performance monitoring with little or no transparency.

Unfortunately, without a broadband performance monitoring and reporting program, the ACCC could be asked to sign off on an industry guideline that achieves little other than to hide what is actually happening and seeks to convince consumers that poor broadband performance is generally outside of the RSPs control.

We should expect the guideline to fail to mention under provisioning causing congestion and the government’s decision to use second rate technologies for the NBN thereby reducing reliability and performance.

The fallout from the lack of transparency on broadband speeds and performance affects consumers and small business, which is often forgotten when it comes to discussing consumer related telecommunications issues.

For small business, right around Australia, poor broadband reliability and performance translates into lost opportunities in the global digital economy and it is vital that small business be provided with certainty about which broadband plans offer the best reliability and performance.

The ACCC’s ongoing effort to introduce a broadband performance monitoring and reporting program and to hold RSPs to account for poor broadband performance should be applauded and deserves our full support.

Dr Mark Gregory is a Senior Lecturer in the School of Engineering at RMIT University and Managing Editor of the Australian Journal of Telecommunications and the Digital Economy

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