Government orders review into NBN customer experience

01 August 2017


Federal Communications Minister Mitch Fifield has ordered a review into "NBN customer experience" following the network builder's own admission that subscribers have been subject to speed and performance issues.

The Australian Communications and Media Authority (ACMA) is heading up the investigation, and will obtain information from 21 industry participants including retailers, wholesale providers, and NBN itself. ACMA will also commission research to gather feedback "directly from customers about their experience before, during and after migration to the NBN". Fifield says the research will span the entire range of technologies used to connect premises to the National Broadband Network.

"This information will be used to identify where customer issues most commonly arise and how those issues can be either avoided or resolved more quickly," said Fifield. "It will also help reduce the passing of customer complaints between retailers and NBN."

Following an interview with The Australian Financial Review last week, NBN CEO Bill Morrow doubled down on blaming internet service providers for the poor experiences NBN customers are having. Morrow has accused ISPs of "cutting corners on quality to save on cost".

"We are seeing signs of this in the early stages of this land-grab battle and for some Australians it means the quality of their broadband service is not meeting their expectations," said Morrow. "In many instances, the service and speed disparity we are witnessing between what an end user is expecting and what they are experiencing is a function of this price war."

Morrow has however acknowledged that NBN's wholesale pricing model contributes to this price war, and has said the company the is considering an overhaul.

The pricing for a wholesale National Broadband Network connection is made up of several key components, including the controversial Connectivity Virtual Circuit charge (CVC). CVC is the amount of network capacity shared between an ISP's customers. ISPs previously paid $15.25 per Mbps per month, which under new volume based discounts, could go as low as $8 per Mbps per month.

CVC is typically blamed as the leading cause of congestion on National Broadband Network, given that it is impossible for ISPs to buy enough to guarantee every single customer the speeds they're paying for at peak times. However, Morrow has accused ISPs of drastically under purchasing CVC.

"The average CVC being purchased across the industry works out to about 1Mbps for each end user," said Morrow. "Under our pricing model that could be doubled to 2Mbps for each end user for around an extra $5 per month."

Morrow says CVC is necessary in order ensure a rate of the return for the Government, and to offset the financial losses in less dense remote areas with the profits made in the high-density areas.

While Morrow has admitted the need to "evolve" NBN's pricing structure, the company has yet to provide specifics.

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