An “unacceptable” marketing campaign saw NBN Co wrongly threaten more than 20,000 households in Canberra with disconnection if they didn’t switch to the NBN, the ACCC has ruled just weeks before the network builder prepares to celebrate finishing its primary rollout.
NBN Co’s marketing campaign ran from January to July 2019 when, the ACCC said in announcing a court-enforceable undertaking against the company, the company warned ACT residents that their telecommunications services would be disconnected if they didn’t connect to the NBN.
ACCC chair Rod Sims was unimpressed, calling it “unacceptable for NBN Co to tell consumers on other broadband networks such as the TransACT Network that moving to the NBN is their only option, when that is just not correct.”
Although NBN Co’s network rollout was predicated on the staggered decommissioning of Telstra’s legacy copper phone network, no such rule applies to the more than 55,000 ACT households get broadband, telephone, and pay TV services via services from NBN Co rival TransACT.
TransACT parent company TPG Group has a long history of confrontation with NBN Co, having started an aggressive rollout of fibre-to-the-basement (FttB) services that threatened NBN Co’s revenues in many dense, high-profit inner-city areas.
NBN Co fast-tracked its own rollouts in those areas to fend off competition from TPG, but TransACT’s network was already well established before NBN Co rolled into town.
Conversely, Shadow Communications Minister Michelle Rowland this week suggested that NBN Co should consider buying alternative fibre networks to fill out its footprint.
Despite its monopoly over wholesale broadband services, telecommunications industry analyst Paul Budde said NBN Co’s misrepresentations highlight the risks when one company is given dominant market power – as was long the case with Telstra.
With its network now all but ubiquitous, he told Information Age, NBN Co “falls into the trap of now being a monopoly… in their ignorance or habit, these things happen because monopolists are so powerful.”
“It’s a cultural thing that you have to be extremely careful about, to avoid it happening – but that’s how monopolists are: enough is never enough.”
Under the terms of the enforceable undertaking, NBN Co conceded that its conduct “was likely to have been false or misleading” and violated Australian Consumer Law.
NBN Co will, among other requirements, stop incorrectly telling consumers their services will be disconnected; publish notices in print and online, as well as writing to each affected household explaining the situation; reimburse customers any early termination fees or reconnection costs they incurred; and reimburse TPG at least $20,000 for its costs in correcting the communications sent by NBN Co.
NBN Co will also, the undertaking outlines, publish a public register of competing network operators in areas where it is operating; write to customers in those areas explaining that they have a choice of network; and implement a three-year Competition and Consumer Compliance Program designed to prevent further malfeasance.
“Customers should be able to trust that NBN Co is providing them with accurate information,” Sims said. “The ACCC will not hesitate to seek high penalties in court against NBN, and other telcos, if we see this type of conduct again.”
It’s hardly the first time NBN Co has attracted the ire of the ACCC – last year, for example, the government-owned wholesale monopolist was given a formal warning for violating its transparency and non-discrimination obligations by favouring certain retail service providers (RSPs).
NBN Co has been working hard to position its rollout as a paragon of success, recently announcing that third-quarter results and rollout figures were “ahead of target” and launching three new wholesale plans – offering speeds from 100mbps to 1Gpbs – that promise to boost its revenues ahead of the long-mooted sale of NBN Co to a private buyer.
NBN Co “is under enormous financial pressure to rake in as much money as it can”, Budde noted, warning that such pressures can easily beget the type of behaviour for which NBN Co is now being censured.
“That absolutely is another element that impacts the cultural issues that come from these companies just bullying themselves into the market.”