Telstra, Optus fail to negotiate any service improvements with NBN Co

NBN Co has rejected all suggested improvements to service quality by Telstra and Optus in a commercially-negotiated process it lauds as successful.

The failure of closed-door negotiations for what goes into the wholesale broadband agreement (WBA), has retail service providers (RSPs) wanting direct intervention by regulators and government to lift standards.

A major sticking point in the rewrite of the regulated special access undertaking (SAU), which governs price and non-price terms for NBN access through to 2040, is that it seeks to raise prices, without improving most broadband services.

Service standards are included in the SAU for the first time but they are outdated - and while NBN Co claims [pdf] to have made some concessions in this area, big RSPs say the changes aren’t “material”.

The fact that RSPs have had limited to no luck in shifting the needle on service standards in the commercially-negotiated WBA process should come as no surprise; it was exactly this power imbalance that led to the SAU being put up for review.

Telstra said [pdf] it had had no success in trying to negotiate better standards directly with NBN Co.

“There has been no material improvement … as part of WBA negotiations,” Telstra said.

“Further, NBN Co has declined to include any service quality improvements put forward by Telstra.

The story is the same over at Optus [pdf].

“We have proposed four reasonable and what we believe to be minor service level improvements in our negotiation with NBN Co,” Optus said.

“All have been rejected.”

The telcos have all but given up on achieving anything in commercial negotiations with NBN Co, and are focused instead on trying to drive change through the regulated process.

Telstra said that baseline service standards “must be expanded to address areas of concern raised by RSPs that have not been resolved through commercial negotiations.” 

“These relate to outage notification, priority assistance and speed rebates,” it said, adding there also needed to be consequences for NBN Co when it missed service standards.

Telstra has previously outlined the issues around outage notification, with apparently “planned works” sometimes attracting as little as one hour’s notice.

It is also unhappy that “NBN Co can charge RSPs for 50/20 and 100/20 speeds supplied on FTTC, FTTB and FTTN lines but can supply speeds as low as 25Mbps without any consequence.”

While NBN Co claims to have offered some concessions on service standards, Telstra said these either low-balled NBN Co’s current performance, or would benefit customer numbers that could be counted on one hand.

“For example, while the inclusion of service levels for connection and fault rectification in isolated areas is welcome, it is not a material concession given the very low number of customers that will benefit in the first regulatory cycle [the three years through to FY26],” Telstra said.

“In Telstra’s experience, one [customer] in the last 12 months and one currently scheduled for the remainder of this year would be covered by the proposed concession. 

NBN Co argues it largely can’t improve service quality standards while it still has customers on copper-based networks, because higher standards would be too expensive to meet, and would damage revenues.

It argues that most change to service quality will come when more of its customer base is on fibre-to-the-premises, but that depends entirely on a slow upgrade program, for which NBN Co has consistently refused to provide statistics on, and on customers paying higher prices to qualify to be upgraded.

Telstra is critical of copper being used as a roadblock to improving service quality.

“While FTTP has the potential to solve many problems experienced by end-users, the reliance on FTTP is misleading from a quality-of-service perspective,” it said.

“The number of end-users who will benefit from FTTP in the first regulatory period [through FY26] is limited. Further most of those who will benefit will have to pay for the privilege through higher-priced plans. 

“NBN Co is simply not doing enough to support the majority of its customer base who will remain on MTM [multi-technology mix] technology for at least the first regulatory cycle.”