ADDRESS TO ACCANect 2017

SYDNEY - THURSDAY, 21 SEPTEMBER 2017

I acknowledge the Gadigal people of the Eora Nation as the traditional custodians of this place. 

Teresa Corbin, ACCAN CEO, thanks for the invitation to speak to you today and the great work that you and ACCAN do to advocate for telecommunications users. I’d particularly like to thank you and the new alliance you are part of and for advocating on behalf of regional and rural consumers. 

I’d also like to acknowledge Johanna, who I know if finishing in her role as chairperson after five years.

ACCAN is an important organisation providing invaluable advice and information on consumer issues.

Without the well-informed advocacy of organisations like ACCAN, my job as a Parliamentarian would be a lot harder.

I sit on Parliaments’ oversite committee for the NBN and I’m Shadow Minister for Regional Communications. We are working hard to remove one of the diminutives from that title.

The theme of today’s conference is “Your place in the connected world”.

It’s now around 12 months from the next federal election.

We are more than halfway through the NBN rollout and its 4 years since Messers Abbott and Turnbull made the fateful decision to ditch Labor’s fibre optic NBN in favour of a Multi-Technology Mix.

This “national tragedy” was to substitute copper for fibre for the majority of fixed line premises - the majority of these are in regional Australia.

Let me tell you, it is not going well.

At the moment, there is strong public support for a Banking Industry Royal Commission. This comes after a series of scandals, allegations of systemic failures in governance, unethical marketing and selling behaviour and an unassailable wall of consumer complaints.

You would not be surprised to hear that in 2015–16, the Financial Ombudsman Service (FOS), Credit and Investments Ombudsman (CIO) and Superannuation Complaints Tribunal (SCT) together received a total of 41,223 ‘disputes.’

In the same year, the Telecommunications Industry Ombudsman (TIO) received 112,516 ‘complaints.’

So, we have one critical industry, the banking and financial industry, which touches every household and business in the country. One which is critical to our national economic development and social equality and one where there is sufficient outrage to support the extraordinary call for a Royal Commission.

And yet, in the telecommunications sector, which I would argue is just as critical, where there are 3 to 4 times the number of complaints as there is to the banking and finance industry; but the industry, the Minister and the Government think everything is A – O – K!

Well it’s not.

Let’s be frank. We have a crisis and it demands a response.

My message to business and the Government is that business as usual won’t cut it.

Yes, we love our phones but that doesn’t mean we love our phone companies.

Just like we love our homes but not necessarily, our home loans.

The Government needs to hear your voice; it needs to understand the problems. It needs to act.

Can I give a few examples?

The Migration from the old network to the NBN:

The migration to the NBN, the switch-over is clumsy, disruptive and costly to businesses and households.

Missed appointments, failed installations, phones and broadband services cut off for weeks and months at a time and absolutely no recourse for consumers.

People give up a day’s work for an installation appointment – only to find nobody turns up. Then they have lost pay or given up annual leave. The Government seems oblivious to this cost.

Businesses are in the same position.

A few weeks ago, I was in Redcliffe, Queensland where I spoke with a small businessman, Tony Linford. He runs a small home-based business distributing agricultural equipment that is entirely dependent on broadband connection. He has been waiting for nine months and told me he has given up on the NBN.  

His mate, Dennis Austen, is a local real estate agent. Dennis has had nine months of constant service loss and drop outs.

In Newcastle, I spoke with florists and smash repairers with similar stories. In fact, up and down the country it’s the same story.

Last Friday, I met with members of the Illawarra Business Chamber who detailed the stories of lost business and poor customer service. The NSW Business Chamber say that 43 per cent of its members had NBN problems. That 39 per cent had to wait more than four weeks to get a connection to come on line.

They estimate the average loss to their members is around $9,000 per business.

NBN CEO, Bill Morrow, says that NBN gets it right 85 to 90 per cent of the time. And Minister Fifield thinks this is great.

I dispute this figure.

I have asked NBN, and the Department, to release monthly fault and fix figures.

They won’t. And that raises the question, why?

But let’s just say they are right. Think about it. Can you imagine a 10 per cent failure rate being acceptable in any other business?

Imagine if my local Fish and Chip Shop thought it was ok to sell hamburgers even though 1 out of every 10 gave someone food poisoning. You know it isn’t right. 

Fault Rectification

If it was just the initial failure rate – in a big infrastructure project like this - people might be a bit forgiving. But when the fault rectification process has more in common with children’s antics than a multi-billion-dollar industry, then that is what sends consumers nuts.

The squabbling and finger pointing between NBN and RSPs about whose fault it is has grown tiresome.

According to the most recent NBN Weekly Report, there are 268,000 premises “not ready to connect” in Service Class 0 (FTTP), Service Class 10 (FTTN/B) or Service Class 20 (HFC).

NBN has recently re-badged these unserviceable premises as “not ready to connect,” but this is not a plan to fix it.

I’m glad that NBN will now make some effort to provide an estimated timetable to connect these premises but the company has recently conceded that these premises may take years to connect.

The migration experience doesn’t have to be like this.

In New Zealand, where they are rolling out a Fibre-to-the-Home network, at a comparable cost to our copper Fibre-to-the-Node network, the wholesaler does the full connection and doesn’t leave the premises until they are satisfied that the broadband service is fully working.

New Zealand - where there is no crisis of confidence; no second rate NBN technology for regional towns.

New Zealand have a clear, three-stage installation process that works.

It’s bad enough getting thrashed by the All Blacks in Rugby, but in broadband as well; that’s too much.

Service Reliability

Consumers should have confidence that they get the service that they are paying for. 

I have been advocating for a stop to the sale of dodgy services that can’t be delivered. Services that see:

  • 25 Mbps at less than 10 Mbps and,
  • 50 Mbps at an average of 20 Mbps.

I believe that if you are going to be in the game of selling a service, then industry has to be very clear with customers about what they will be getting, for what they are paying.

I welcome the Australian Competition and Consumer Commission’s six principles to guide RSPs in marketing their NBN products.

We’ve heard how a considerable number of customers on the NBN are not receiving the speeds that they were promised by their RSP.

The ACCC pressed for a Broadband Performance Monitoring and Reporting program. We know that ACCAN have supported this program.

The fact is, if you can’t make money out of an honest, transparent service then frankly, get out of the game.

But we know that this is not the extent of the story. Evidence to the Parliamentary NBN Committee which has been conducting hearings around Australia over the past six months, is that many of these service reliability issues are directly related to the Multi-Technology Mix and poor installation and quality control.

The Turnbull Government has been keen to say this is all the fault of RSPs but here they are engaging in the now infamous sport of NBN “ping-pong” as well.

We know that there are issues with under-provisioning of CVC.

We also know that there are big problems with network stability, capacity and technology.

The Government’s Fibre-to-the-Node technology builds in a digital divide in every neighbourhood in the country. And the further you are from the node, the greater the limits on your service.

There’s a stark difference between what NBN Co cites as “average attainable speeds” and on the ground experience.

What concerns me is that people will not sign up for higher speed packages of 50 Mbps or 100 Mbps while they aren’t getting what they purchased at 25 Mbps. 

NBN says that the “average attainable speed” on Fibre-to-the-Node is 67.7 Mbps.

They have also said that for 35 per cent of Australians on FTTN, that 50 Mbps is the current attainable rate.

NBN acknowledges that these figures do not reflect actual speeds experienced by end users.

Dispute Resolution

Consumers would be aware that protections and safeguards for dealing with these issues are weak and ineffective.

And if they are not working during the rollout phase then there’s no reason to expect that they will get any better.

The Telecommunications Industry Ombudsman framework is not fit for purpose.

There are a number of limitations to the role of the so-called “independent arbiter.”

The TIO does not have the powers to even get NBN and RSPs to meet in order to resolve issues.

The TIO have told the NBN Committee that when it comes to the rampant blame shifting between NBN and RSPs, just being able to get the parties in the same room would help shift the roadblocks.

Make no doubt, until this is fixed the NBN “ping pong” will continue.

Now we know there are many cases where an RSP cannot provide a service because the connection to the network isn’t there.

As a result, the TIO is unable to help customers caught in the blame-shifting nightmare between NBN and RSPs.

What’s clear is that, as a wholesaler, the NBN is trying to wash its hands of these problems and shift customer complaints on to the RSP.

Customers are left with nowhere to turn. Their RSP can’t help them. NBN refuses to and the TIO says it has no powers to help.

In frustration, customers are turning to their local Members of Parliament and Senators.

We should be very clear - the problems we are facing now are not the result of an oversight or omission. The consumer rights framework has been specifically designed to operate in the way it is right now.

We know this because the Prime Minister has told us so.

In 2014, he championed this light touch framework of the telecommunications sector.

In his words:

The guiding principle [of the Coalition Government] was progressively to remove regulatory barriers and constraints on genuinely competitive conduct and actively engage with the telecommunications sector to transfer much of the responsibility for regulation to the industry itself.

The problem with the people who champion this approach is that they can’t see the difference between red tape and a guard rail.

It’s all the same to them.

Consumers need a new approach.

What needs to be done

The Regional, Rural and Remote Communications Coalition – of which ACCAN is a member.

Have set out a list of demands of Government and the industry:

  1. A universal service obligation that is technologically neutral and provides access to both voice and data;
  2. Customer service guarantees and reliability measures to underpin the provision of voice and data services, to deliver more accountability from providers and NBN;
  3. Long term public funding for open access mobile network expansion in rural and regional Australia;
  4. Fair and equitable access to Sky Muster for those with genuine a need for the service, and access which reflects the residential, educational and business needs of rural and regional Australia
  5. Fully resourced capacity building programs that build digital ability, and development of effective problem-solving support for regional, rural and remote businesses and consumers.

There’s much that can be agreed on.

The Initial Connection Process  

The Government relies on the Migration Assurance Framework as the main instrument to provide a smooth installation of NBN services. 

There are only two problems with it:

  1. It’s not working
  2. And when it doesn’t work, it doesn’t give consumers any rights or remedies.

It’s no answer to the NBN “ping pong” between NBN and RSP technicians.

ACCAN has called for wholesale service obligations that set timeframes for connections, fault repairs and network reliability benchmarks and that these obligations need incentives in the form of end user compensation, penalties and wholesale pricing considerations. 

I agree that the current reliance on the Wholesale Broadband Agreement between NBN and RSPs is inadequate for this purpose. But even if it was fixed, it wouldn’t provide consumers with any actionable rights. That’s why we need to urgently update the CSG.

Customer Service Guarantee – needs urgent update

The existing Customer Service Guarantee framework only applies to telephone services. It doesn’t apply to broadband.

There is a very strong case to extend the CSG to broadband.

No upgrade path for Regional Australia

Fixing these consumer regulatory issues is critical but there remains an important job of work to be done to address the digital divide. The real tragedy of the rollout of copper Fibre-to-the-Node is the story of what happens in regional Australia.

Regional Australia where there are country cities and towns which may never get their network upgraded to a better, fibre NBN.

Two weeks ago, the NBN Co and the Department of Communications confirmed that there is no plan and no budget to upgrade those customers on the copper NBN and that this will not happen until there is a business case to do so. 

I believe that this is one of the most egregious aspects of the damage that Malcolm Turnbull has done to the NBN project. 

I’m pleased to hear that the National Farmers Federation have identified improving the regional communications network as the key factor in improving our agricultural productivity. 

It now falls to the NBN to spell out a plan for how regional Australia can enjoy the same service that people in the city will take for granted.

Bridging this “digital divide” is the most effective way to boost regional communities, provide access to government services, drive decentralisation and regional development, and provide opportunities in the information economy including in health and education.

ENDS