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Carriers To Be Hit Over Poor Service As NBN Flexes Its Muscle

Carriers who struggling to compete as consumers switch from traditional ADSL broadband to NBN are set to be forced to deliver a minimum level of service for customers.

At the same time questions are being raised about the speed of the NBN despite some people getting blisteringly fast NBN speeds kilometres away from a local exchange while other claim that the service is worse than their prior service.

I recently switched to the NBN via Telstra and I live two kilometres away from my local exchange I am now getting over 70Mbs in peak periods and over 90Mbs in off peak times. This is a dramatic improvement on the prior 23Mbs prior.

NBN chief executive Bill Morrow has told Fairfax Media that he is reviewing the pricing model for Australia’s $50 billion broadband network that could include measures to give disgruntled customers a better idea about the quality of the service they were paying for. He said a “land grab” by retail service providers chasing market share was misleading customers about the speeds they were paying for.

“We have to take it seriously, it is causing reputational damage and it does need to get fixed and we are committed to working with the industry to get it fixed,” Mr Morrow, who will go on a charm offensive later this week to try and head off the NBN’s critics.

Morrow said a review of the NBN’s pricing model could include introducing “minimum assurance” standards for certain products, such as media streaming, to ensure customers were receiving a certain level of service.

“What we are considering, and we are in consultation, is looking at a restructuring of the pricing mechanism,” Mr Morrow said.

“I am sympathetic with the many smaller retailers, in particular, who say I am stuck in this price war and I can’t step up and raise my price to the end users.

“So, we are thinking can we restructure the CVC (Connectivity Virtual Circuit charge) and the AVC (monthly access charge) to have a minimum assurance of a certain quality of product … do we introduce a media streaming product?”

No pricing changes were imminent, but he said NBN Co was having initial discussions with broadband providers.

When asked if the NBN had an image problem, he said: “I do [agree]….it is partly our fault. It is partly taken out of context because 85 per cent [of customers] are fine with this. It is the 15 per cent that is a large number because of the volumes we are dealing with. It is not just a lightly dissatisfied but a seriously dissatisfied service.”

Mr Morrow argued that the number of complaints was rising as new network connections accelerated, but the overall percentage had fallen. It is activating about 40,000 to 50,000 new customers a week, which will increase sharply between now and the project’s completion date in 2020.

The NBN has been swamped with complaints from customers about speeds that they say are lower than what they used to get on ADSL. The industry has also come under attack for advertising “up to” internet speeds that are never reached.

Australian Competition and Consumer Commission chairman Rod Sims said last week Telstra, Optus, TPG and Vocus could face legal action if they were found to have misled consumers about their NBN speeds.

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