Customers Overpaying on NBN Services

Original source: iTnews

Analysis: Bad process, bad data.

Retail service providers (RSPs) are refunding thousands of NBN customers for selling them internet services at unattainable speeds as a result of bad NBN Co processes and data.

The RSPs have been publicly shamed for selling NBN customers internet services that their copper lines could not physically support.

NBN Co has largely escaped retribution, and its CEO Bill Morrow continues to foist the blame on RSPs.

But NBN Co shares some of the culpability for these incidents.

It is the network builder’s poorly-designed process and unfit-for-purpose line speed data that is putting RSPs in a bind when trying to sign up new customers.

How the process works

RSPs fly somewhat blind when they sell a new FTTN/B connection because data on the maximum speed the line is capable of is poor or incomplete.

iTnews can reveal that the NBN dataset used to provide RSPs with an initial indication of the maximum attainable line rate for a new service is not only “theoretical”, but also only available for 80 percent of premises.

In other words, for one in every five new FTTN/B connections sold, the RSP has no idea what speed the copper line is capable of.

That makes recommending an appropriately tiered NBN plan to the customer at the outset difficult.

For the 80 percent of premises where data is available, it may not be in great shape. For example, it may not take into account all parts of the end-to-end connection, and so again is a somewhat unreliable indicator.

Where that leaves RSPs is that they must connect new customers regardless, and then perform their own reliable measurements of the line rate once the connection is made.

NBN Co provides them with a tool to do this as well as weekly reports on what the line speed looks like from their end.

At this point, RSPs must review what they have sold FTTN/B customers and adjust the retail plans accordingly.

This appears to be where the current batch of overcharging has occurred: where RSPs have sold new services and – for whatever reason – have not reviewed whether the customer needed to shift plans in a timely manner once the condition of the copper line was understood.

There may be a simple explanation why they didn’t review things sooner: they were not under the impression they had to.

All on the RSPs

NBN Co CEO Bill Morrow confirmed parts of this process for making new connections at a financial briefing this week.

He said RSPs were initially given “some high level ranges of what we think theoretically [is the] speed for that particular home [that we] can deliver”.

“But we make sure the RSP understands that until we actually have a modem in the house we cannot be certain about that speed,” he said.

“Once the service is installed and the modem is in place, we do a sync rate test and that will tell us exactly what the maximum Mbps capability of that copper line is and we send that report to the RSP. We continue to send ongoing reports to the RSPs of what their particular customers can attain.”

Morrow said it was “up to the RSPs whether they go back” and review what they sold to the customer, once better line speed data is available.

“If you’ve purchased a 100Mbps product from the RSP but the sync rate has come through from NBN Co that the line is only capable of 40Mbps, then it’s up to the RSP to say ‘I’m going to downgrade you to a 50Mbps product so you don’t pay for anything more than what you actually use’,” Morrow said.

“In some instances we saw RSPs that were more proactive [in doing this].

“In this case, we’re seeing Telstra and Optus come forward with the work of the ACCC. It is a very good move for the industry.”

What the RSP knows, and when

But there are several large question marks over the accuracy of the official NBN Co version of events.

It’s unclear when the requirement was put on RSPs to review and adjust the retail plans of every NBN service they have sold: from September 2015 when FTTN services were launched, or more recently as a reaction to serious discrepancies being uncovered between the initial and actual line speeds.

The available evidence points to the latter.

Telstra indicated it has only been reviewing the issue “since May 2017”. Other RSPs said their own reviews had uncovered problems in the same mid-2017 timeframe, coinciding with the release of ACCC guidance on how RSPs should represent the NBN services they sell.

Sources at multiple RSPs told iTnews the requirement to review the retail plans they sell (or have sold) once better line speed results are available is a new one that did not exist pre-2017.

That would suggest NBN Co has only recently worked out just how bad the line speed data it supplies to RSPs in the initial sale process is.

That initial line speed data is understood to have been sourced from old Telstra “cable records”.

Though the records are now not considered a particularly good indication of line speed in the NBN VDSL construct, the level of distrust in this dataset appears to be a relative recent phenomenon.

But there’s enough distrust now to also cast doubt over the provenance of follow-up data NBN Co provides after the connection is activated; while NBN Co offers a measurement tool and weekly reports, RSPs now do their own line speed testing, using their own tools.

Four-week leeway

RSPs say they rely on the upfront NBN data to make representations to consumers in the sales process: the same data NBN Co admits is unfit-for-purpose and needs to be re-collected once a service is activated.

“We are reliant on NBN-sourced data to provide consumers with advice about what kind of speeds could be possible at their address with an NBN service,” one RSP told iTnews.

“During sales conversations, we conduct service qualification checks using NBN data to provide customers with an estimation of the speeds that could be possible in their area.

“Our sales consultants also rely on this NBN data to provide customers with advice about whether their line can support a specific speed tier.”

To date, that has left RSPs with two choices: provide customers the speed tier they ask for, or put them on a basic 12Mbps or 25Mbps service until they can properly work out what the line is capable of supporting.

Telstra’s overcharging arguably illustrates this choice.

The highest number of Telstra customers impacted wanted 100/40Mbps speeds; Telstra had limited information at the time of sale to determine whether or not these speeds were possible, and it’s only once the line speeds were properly measured that the situation became clear.

Alternatively, several RSPs have simply put all customers on more basic speed tiers. This could be a smart strategy: customers get a service out-of-the-box that their line can support, and if proper line speed tests prove favourable, they may be able to move to higher tiered services at a later date.

The customer experience stays positive, and it avoids any repercussions caused by a lack of reliable line speed data at the point of sale.

Events over the past week have afforded RSPs a new, more flexible option when signing up NBN customers.

Telstra struck an enforceable undertaking with the ACCC that requires the telco to run its own line speed checks within the first four weeks of the connection being active. Customer remedies are offered if the line speed is incapable of supporting the chosen retail plan.

That is now viewed by many RSPs as the default legal standard for dealing with line speed issues (and avoiding incurring the regulator’s wrath).

It’s also a major step forward: RSPs will never be able to accurately tell consumers what speeds they can expect to receive before the NBN retail connection is activated; more realistically they may be able to do so within the first month of active connection.

It’s worth noting that for RSPs other than Telstra, the four weeks’ grace in which they can properly measure the line speed and review the retail plan has some flexibility in the eyes of the ACCC.

But it’s still unclear how RSPs can properly represent the speed of NBN services at the point of sale, given their patchy access to information on what those speeds might be.

On this, the ACCC advice remains somewhat confusing.

“We expect RSPs to provide consumers with accurate information up front about the internet speeds they can expect to receive, and then deliver on those promises,” ACCC chairman Rod Sims said when the overcharging issue surfaced last week.

In other words: if an RSP can’t guarantee the speed of the service, it should be made clear to the prospective customer at the time they are signing up.

This appears to be the only way an RSP can stay within the bounds of Australian consumer law, and out of trouble.

Opening access to line speed data

To date, the line speed data debate has stayed between NBN Co and the RSPs, but that could be about to change.

Federal Labor politicians have been pushing the government to have NBN Co publish accurate line speed data so customers can see what is possible for their service.

Both NBN Co and the RSPs now hold data on line speeds, captured by the use of their own respective monitoring tools.

NBN Co’s preference is that RSPs share good data with just their own users – and if RSPs don’t commit to do so, their hand may be forced.

“We think the RSPs should be publishing this to their respective customers and that way we [NBN Co] don’t get into trying to police or supervise something they are responsible for,” Morrow said this week.

“Having said that, I think the government is looking at if the RSPs don’t volunteer to do this, should NBN Co actually step forward to consider [doing so].

“In my view I think we are going to see more information available on this, but whether NBN Co is the direct source or an indirect source is still being worked through.”

Original source: iTnews