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Joint Standing Committee on the National Broadband Network
04/06/2018
Business case for the National Broadband Network Rollout of the National Business Network in rural and regional areas

CORBIN, Ms Teresa, Chief Executive Officer, Australian Communications Consumer Action Network

LAWRENCE, Ms Una, Director of Policy, Australian Communications Consumer Action Network

CHAIR: Welcome back. Information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. You have lodged submission 12 with the committee. Would you like to make any amendments or additions to that submission? I should note that that is a submission as to the rollout of the NBN in rural and regional areas. Would you like to make any additional comments? If not, just an opening statement will suffice.

Ms Corbin : I think we'll go straight to our opening statement. There are a couple of additions as to the actual figures, which have been updated since our submission by NBN's public information, so we'll just correct them as we go along.

Thank you to the committee for the opportunity to present today on the key issues affecting rural and regional consumers and the rollout of NBN. The Australian Communications Consumer Action Network is the peak consumer advocacy group for telecommunications consumers in Australia, and we have been a strong advocate for improved communication services in non-metro areas for many years. More recently, we have become one of 20 members of the Regional, Rural and Remote Communications Coalition, along with organisations such as NSW Farmers, who the committee heard from earlier; the National Farmers' Federation; the Isolated Children's Parents' Association and, of course, BIRRR, who you'll hear from later today.

We want to begin by acknowledging that NBN has brought significant improvement to broadband services—compared to what they had previously—for rural, regional and remote areas of Australia. Notwithstanding the evidence that was presented by NSW Farmers, who are getting on-the-ground, grassroots information, we do contend that there have been some more positive reports about consumers using Sky Muster services—overall, that many of the teething problems have been addressed. That doesn't mean that there aren't ongoing issues with reliability, as reported by NSW Farmers, but we are aware that NBN is continuing to work on and address those issues.

We also want to say that plans and overall data allowances over Sky Muster are offered on a similar price to those in fixed and fixed-wireless footprints, and from October last year there was a significant increase in the peak and off-peak allowances, reflecting actual usage. These have been welcomed, but there's always a big discussion about how you meet non-metro standards with what metro consumers are actually able to receive. And, of course, the reality is that by the time you bring in all the costs of services, regional and, particularly, remote consumers are still paying a higher amount and getting a slower speed. That's just a reality of the technology that they're using. They're also paying a higher amount because, in most instances, they are paying for not just a data service but also a voice service, whereas in metropolitan areas it's packaged as one thing. So the comparisons are not straightforward; they are definitely more complex than just saying, 'Non-metro users get X, and metro users get Y.' You need to have a better understanding of the complexity of how these services are delivered.

Despite all the positive developments, we believe the demand for Sky Muster services is still low, and it's lower than expected. As of 24 May 2018, the total number of premises identified by NBN as ready to connect to Sky Muster is just over 429,000—or, potentially, four per cent of the premises—but the actual number of connected premises is just over 89,000. In our submission it was a slightly lower amount. The take-up rate is, undoubtedly, slow. We think a contributing factor to this is the ongoing and, very early on, extremely negative reports about Sky Muster services, and also a lack of awareness about the service and a lack of ability to make cost comparisons as far as affordability, particularly when it comes to whether or not mobile services are more expensive than the Sky Muster service. To address this we're recommending that there is a concerted campaign via direct mail to raise awareness of the service availability and to better inform people about their options. However, we know that there are some consumers in the satellite footprint who are happy with their existing services—such as ADSL and alternative fixed wireless providers—and have no incentive to switch at this stage.

Despite the improved performance and positive reports that we have received, particularly from NBN, and the reliability information that they're now providing to us, there are still outstanding concerns for consumers, particularly in relation to managing data across peak and off-peak times, which can be challenging even with increased allowances, and the Sky Muster Fair Use Policy, which remains complex and confusing. We're also still waiting for the business plans. Businesses in the Sky Muster footprint are still waiting for the delivery, and we understand that there will be a scheduled rollout for this later this year.

The congestion, we believe, is affecting people particularly at peak busy times in areas along the eastern seaboard, in Tasmania and around Perth and Darwin. We are hearing that many consumers are frustrated by this experience. While we know NBN is remediating the situation, we still have concerns against independent performance standards and consumers who we believe should be compensated with a schedule of payments if standards are not met.

We think that the information about NBN congestion and delayed upgrades is not being passed on to consumers by the retail service providers, even though they are being told this information by NBN. Due to the lack of information, consumers have tried switching providers, sometimes at a cost, and only realised that it makes no difference after they've done it. Others have paid hundreds of dollars for technicians to travel a long way to their houses and are then advised that there's nothing they can do because it's a congestion issue. There are no arrangements in place to refund consumers for periods where the service hasn't performed as it should. RSPs are still selling services in areas served by congested towers, and this only exacerbates the problem for those already using the service and reduces the consumer trust in the performance of NBN overall.

So we're recommending that this needs to be addressed as a priority and that affected consumers should be contacted and informed about congestion issues and about the timing of network upgrades, because we know that they have a schedule of rolling upgrades currently happening. We also think that they should be refunded and offered reduced pricing until their services are performing as they should, and we think retailers should not continue to sign up customers to the network in areas that are known to be congested. That's a controversial statement that we're making there, but we think that, because it only exacerbates the problem, that's the position that should be taken at this point in time. The ACCC Measuring Broadband program should be extended to fixed wireless and satellite areas so that consumers can understand what to expect, and there should be more transparency overall.

This leads in nicely to the wholesale service standards and our position in relation to this, which the ACCC is currently looking at. The fixed wireless situation shows why there is a need for an NBN wholesale service standard. The significant increase in complaints to the TIO—they're not all about NBN, because there are significant increases in other areas, not just NBN—highlights the fact that the top NBN issues are connection delays and unusable service. This indicates that existing arrangements are not working. We think a baseline adequate level of wholesale service is needed to set time frames for fault rectification, connections and appointment keeping, and reliability measures should also be included so that we can get a network benchmark. We can build in some compensation and a schedule of payments if standards are not met.

In relation to the future capacity of satellite and fixed wireless, ACCAN has concerns about the ability for fixed wireless and satellite technologies to serve as the network statutory infrastructure provider, the SIP that's proposed in legislation currently before parliament. This is because the fixed wireless network is designed to serve over 60 per cent of households in the planned footprint, and satellite about 40 per cent of households. This planning assumes that other consumers would continue to use ADSL, mobile or alternative fixed wireless connections for their broadband. However, if fixed wireless and satellite become the only option for a large number of households in regional Australia, we have real concerns that they will not receive satisfactory service. Without investment and reconfiguration, it is unlikely that either network could meet universal consumer needs now or into the future, because they would not perform adequately if there were a higher uptake. This has been reported also by NBN.

The future of ADSL service is something also of concern, because ADSL and copper services are very important to regional Australia, and their future is uncertain. However, it appears that Telstra is slowly removing the option of ADSL service and also copper voice services in fixed wireless areas. You may just be reminded that this is because, while Telstra is required to provide a voice service as part of the Universal Service Obligation, it is not required to provide data or ADSL. As a result, consumers are falling through the gaps between the current USO arrangement and Telstra's commercial interests. There are many communities in areas in the fringe of the fibre-to-the-node footprint that are currently using ADSL. These areas are likely to be switched over to the NBN satellite once ADSL services are withdrawn. For these consumers, the switch to NBN will represent a degradation of service. While the future of copper is being considered in the context of the Universal Service Obligation and the transition to the Universal Service Guarantee, there is no requirement for Telstra to reconnect consumers to its network or offer ADSL services.

As I've already mentioned, the current design of the NBN fixed wireless and satellite does not allow for all households in the footprint to connect. It relies on ADSL services to provide the main broadband services for people not switching to the NBN. If NBN technology is unable to meet the needs of all these consumers and Telstra removes the availability of ADSL, there could be hundreds of thousands of households who lose services or have to rely on expensive alternatives. The government, we believe, needs to take the lead in developing an ADSL future service strategy which examines and addresses these issues, and this must be done in consultation with consumers so the community can have confidence in how their services will be delivered in the future.

CHAIR: Thank you. Ms Lawrence, would you like to add anything?

Ms Lawrence : No, not at this stage.

Senator O'NEILL: Chair, could we have a copy of that opening statement and, if it is possible, perhaps a copy of the one from the previous witness as well?

CHAIR: I don't think that will be a problem. I will pass that on to the secretariat.

Senator O'NEILL: Thank you.

CHAIR: I will just a couple of opening questions. Thank you for reflecting on the positives. That was good to hear. Could you tell us about your organisation—its membership base and distribution?

Ms Corbin : We have 110 member organisations that are based all around Australia. They are very diverse—rural and regional groups, obviously; people with disabilities; tenancy organisations; community legal centres; a lot of organisations that provide services to low-income consumers; financial counsellors et cetera. It's an extremely broad member organisation. The membership of each of those groups, I don't fully know, although the last time we did a survey it was well and truly over a million. The problem is of course that it's a peak body, so some of those members are other organisationals.

CHAIR: Are the memberships via subscription?

Ms Corbin : Yes. People pay an annual membership fee. We do have about 100 individuals who are academics, students and people who are very keen and interested citizens in this area.

CHAIR: What services do you provide to your members?

Ms Corbin : We provide consumer representation and research and obviously also provide some consumer education materials—although that is limited, based on our budget. Just so you are aware, we have a contract with the federal government through the Department of Communications, and the funding that we get to provide consumer representation and research is a levy that is provided on the telecommunications providers. We maintain our independence by getting that funding through the government. Our membership elects our board and the board decides on our strategy and policy issues.

CHAIR: You mentioned that you had recently met with NBN Co regarding, particularly, the withdrawal of the 100 megabits per second fixed-wireless product. Firstly, how is your relationship with NBN Co? Is it improving? I'm not suggesting that it wasn't good, but there have been a lot of submissions made to this committee over the years about getting that contact and availability.

Ms Corbin : Probably about five or six years ago we would have been a lead organisation in saying that the engagement wasn't good. I think I am on the record as saying last year that the relationship has significantly improved. There's engagement from the board and CEO right down to the staff who are actually delivering on the contracts. Last week we met with a team that are managing fixed-wireless and satellite services to clarify some of the issues with fixed wireless. We have a regular engagement with them, a standard meeting, as part of their NBN local engagement as well. So we have a roundtable for regional concerns. But as and when we need to consult with them about specific issues—because we're also members of the Product Development Forum—we will engage and ask NBN for specific meetings. Also, quite often, they'll contact us directly and initiate that as well. So it's quite detailed.

CHAIR: Again with respect to the 100 megabit per second fixed-wireless produce and NBN's decision to effectively take that off the table in order to retain the bandwidth for customers—and you've certainly reflected on congestion—do you support that?

Ms Corbin : First of all, I have to say that we were surprised at the way that it came through. Having said that, we're aware now that it was well and truly stated earlier than last week but we had not focused on it, mostly because of the fact that we've been focusing on the congestion issues. Our opinion is that we think the congestion issues need to be addressed as a priority, and we support the direction that NBN is taking to get on with that as far as having a rollout upgrade program.

What we are concerned about is the future-proofing of that service and the fact that there will be some businesses that would like to see faster speeds at some point in time, so I was kind of sad to see it taken off the table completely. I also don't necessarily think that it's okay to say that there wasn't any business demand when in fact people are struggling to get the basic services—not all, but some people are still struggling to get the basic services—on fixed wireless. I don't think NBN has really tested that marketplace fully at this point in time. It's still too early to make that kind of statement.

CHAIR: In summarising the landscape, you said—I don't want to put words in your mouth, so tell me if I'm not reflecting your comments accurately—the issues around Sky Muster are that people are concerned about its reputation and they are not willing to sign on; hence, the only 18 per cent take up. And fixed wireless is a good product but plagued by congestion.

Ms Corbin : Yes, and I think the other thing that's important to remember about Sky Muster is that it's not the same all over Australia and that there are significant places where there are congestion issues; there is more traffic on some footprints.

CHAIR: Well, there shouldn't be, on Sky Muster.

Ms Corbin : That's right, on Sky Muster there—

CHAIR: There shouldn't be congestion issues because the take-up is so low, but there are problems—

Ms Corbin : Yes, well, there are some footprints that are very full, and that's acknowledged. NBN has a program whereby they are switching some of those users to fixed wireless, and that is an issue that we raised in our submission.

Mr STEPHEN JONES: They're not the remote ones, though—

Ms Corbin : No. That's right. The other thing is: the fact that they were able to increase data shows that it wasn't congested to the point of not being usable, which was an issue with the interim satellite. There was a limit as to how much the government had actually purchased to use on the interim satellite. The issues that still come up for us in relation to Sky Muster are that people want the data allowances to move with the amount that people are using as an average household. At the moment, with the changes, it is meeting that. But that, we know, is going to grow exponentially over time. So that's going to be a challenge for Sky Muster to deliver—not just because of what it's capable of doing but also because ultimately there is a physical limit as to what it can actually deliver.

The other issue is that there is still not good communication about reliability—about outages. There have been improvements. There's a phone service now. There's a website. But there just could be a lot more work done on that. We think that it would be good if NBN local could actually put out more information about when they're going to be in a particular area so that there could be a little bit more engagement with the grassroots, so that it's not just the peak bodies that are getting the information but that, on the ground, people are getting more information.

CHAIR: Do you have a dialogue with the RSPs that enables you to reflect your membership base's views?

Ms Corbin : Yes, with some of them—not all of them. Ultimately, we reach out to them, but whether or not they take up those opportunities is up to them. TPG is an example of a provider that is well known to not engage with anyone in the industry, but of course there is Activ8me and Southern Phone. We have a range of those that specialise in regional area telecommunications, and they come back to us with quite a lot of information.

Mr STEPHEN JONES: Thanks for your evidence and for your submissions. Can I just jump straight into the business stuff. In your submission, under 2.3, you say:

The draft SIP legislation gives the Minister for Communications and the Arts the authority to create standards on the provision of superfast broadband services.

You say that these standards are necessary. Presumably that's an observation about the present state of the services. Can you explain what you mean by that, and why, and what sorts of instruments you want to see introduced under the SIP?

Ms Lawrence : The SIP legislation is very important in giving the minister the specific powers—

Mr STEPHEN JONES: If I might interrupt: just for the benefit of Hansard, the 'SIP' is—

Ms Lawrence : Statutory infrastructure provider.

Mr STEPHEN JONES: Thank you; yes.

Ms Lawrence : So it is very significant, and the paths that we think are very much needed and the measures that we have been advocating for, for quite some time, are those wholesale broadband service standards that Teresa identified previously in her speech. It is fundamentally important that consumers have confidence that their connections will be performed within a certain time frame, that faults will be rectified in a certain time frame and that appointments will be kept. It is also fundamentally important that service reliability of the network is benchmarked independently against performance standards and that there are appropriate measures, incentives, in place that apply to NBN and their relationship with RSPs through to the end user, through to the consumer, that will address those issues. For example, now, with the fixed wireless situation, consumers don't really know what is going on. They don't know whether they have got any rights in relation to a refund. NBN is not looking to provide any sort of refund. They don't need to. They have got their wholesale broadband agreement with their RSPs. This leaves consumers in a really bad situation, not knowing what is going on but also not having any kind of access to easy recourse. These service standards are really needed to come over and above all these contractual arrangements.

Mr STEPHEN JONES: Why aren't the existing wholesale level agreements signed off by the ACCC, the NBN and the retailer sufficient in this space?

Ms Lawrence : The wholesale broadband agreement is a contract between the NBN and its retailers and its customers. It is obviously a risk management document for the purposes of the interests of NBN, and the retailers are the underdogs in terms of their negotiating power. So, it is not an adequate document, or the incentives in there and its ingredients are not appropriately crafted, to deal with the issues that we are seeing from the community.

Mr STEPHEN JONES: Does it give end users any rights?

Ms Lawrence : No.

Ms Corbin : Also, it is not transparent. Consumers aren't aware that there is WBA exists.

Ms Lawrence : It is an obscure, very lengthy legal contract that is not accessible for the general public.

Mr STEPHEN JONES: Is it your submission that the minister wants the legislation that is on foot to be moving immediately to put in place these sorts of arrangements?

Ms Corbin : Yes. We would like to see the legislation go through parliament as soon as possible because, from our perspective, it does lay down the groundwork for future consumer safeguards, which the minister has foreshadowed and is currently undertaking a review about. So we think it is absolutely vital that we get this as soon as possible.

Mr STEPHEN JONES: Ms Lawrence, you referred to problems in the wireless network in response to that previous question. I think I have also heard evidence this morning which suggested either ACCAN or other bodies that you are involved with have received a briefing on problems in the wireless network—congestion in the wireless network. Is ACCAN aware of where the congestion exists within the network?

Ms Lawrence : In Teresa's speech, we've identified that the more populous areas are the areas where the towers are congested. It is along the eastern seaboard, in parts of Tasmania, and clusters around Perth and Darwin in particular. The eastern seaboard is obviously a very lengthy, dense area, and it goes right round into Victoria, of course.

Mr STEPHEN JONES: Has the NBN provided you or any other stakeholders which you are aware of with a briefing on where the congestion exists in the wireless network?

Ms Lawrence : We don't have specifics on which towers are congested. We are very interested to find out more data about that. What we are receiving are accounts from consumers about their frustrations and how, for example, people in Armidale, New South Wales, are very frustrated because at a peak times their service degenerates to such an extent that it is virtually unusable, but they've been told that there is not going to be an upgrade available until October. So it is a very frustrating, aggravating situation for those people.

Mr STEPHEN JONES: There have been some suggestions made publicly by representatives of the NBN and others that the essential problem we are facing in some of these congested areas is superusers within a wireless cell. Have you heard this? Do you agree with this proposition?

Ms Corbin : When we were briefed by the NBN, that wasn't mentioned as a reason for the congestion. I think it's across the board that all people that are using data now are more highly dependent on data than previously. You would think though that they would have scoped for the number of users, but clearly when they first developed the architecture for the NBN they may not have allowed for as much data as people are now requiring. The truth of the matter is that average household usage has gone up significantly—

Mr STEPHEN JONES: About 30 per cent per annum.

Ms Corbin : That's right. That's a challenge to keep up with, and we acknowledge that there needs to be more investment in order to keep up with this. Our big concern is the fact that there is not clear information going to consumers. At a time when in the fixed network some 70,000 customers have been refunded by their providers because they were put on incorrect plans that couldn't deliver the speeds that they were promised, customers on those fixed wireless networks are really questioning why they're paying for a service that they're not getting.

Mr STEPHEN JONES: In previous hearings from this committee in relation to the fixed line network, there have been forceful exchanges by members from this side of the microphone to various representatives about obligations upon the NBN to advise retailers and on retailers to advise consumers when they're selling a product that cannot be delivered. Your evidence this morning goes one step further than that and says not only should they not sell the product that can't be delivered; they should stop signing people up to a fixed wireless service.

Ms Corbin : We have said that, but I say that with great caution because I realise that for some customers this means that they won't have another option. I would hope that they're still able to connect to an ADSL service, but we're aware in some instances that this has been withdrawn. I am concerned that this may leave some consumers without an option for a data service.

Mr STEPHEN JONES: It's better than paying for something they're not getting.

Ms Corbin : That's right. It's kind of, 'Which is the greater evil?' This highlights the need to address this as soon as possible.

Mr STEPHEN JONES: Do you have any understanding of what the scale of this problem is?

Ms Corbin : No, we don't have a full understanding of that, but we are getting widespread reports from around the country, as my colleague has mentioned.

Ms Lawrence : It's quite a significant problem.

Mr STEPHEN JONES: In another part of your submission, you talk about the regional and rural broadband scheme. 'This is the charge upon all network providers, non-NBN network providers, to assist with the cross-subsidy.' As the scheme is currently designed, would this make further investment in both the wireless and the satellite network more or less likely in your view?

Ms Corbin : You would hope it would make it more likely.

Mr STEPHEN JONES: Can you explain why?

Ms Corbin : Obviously, it should actually mean that you have a more clear direct subsidy that's going to the regional provision of NBN services. Whilst we support the regional broadband scheme and we think it's important, because we want to make sure that NBN is a sustainable model and has sustainable funding going forward, obviously there are lots of different ways to do this, and we haven't actually put forward a preference for which way it should be done. What we have said is that services in regional areas absolutely must be subsidised in order to make sure that those consumers are connected. We understand, and so do the consumers in those areas, that it's extremely expensive to provide services in rural and regional Australia. However, the benefit that we derive as a nation far outshines that. The other thing that I should say about the regional broadband scheme is that the only concern that we have really raised about it is in relation to whether or not this may impact on the ongoing affordability for some consumers that are using non-NBN services and whether or not that might push up the overall price. Affordability is an issue we are concerned about as a multifactor issue in the NBN network.

Mr STEPHEN JONES: Back to the issue of wireless congestion—sorry to jump around—how in ACCAN's view should consumers be advised of congestion within a site in which they would subscribe or are subscribed to a service? How should consumers be made aware that there's congestion in a particular cell?

Ms Corbin : It should be through the RSP's, because that's who they're having the relationship with; that's who they're engaging with. Clearly, we would like to see something more in the public domain from NBN about this issue, which organisations that are more aware and engaged, like us, peak bodies—

Mr STEPHEN JONES: Will the RSP always know where there is congestion?

Ms Corbin : We've been briefed by NBN to say that the RSP's are informed of congestion issues. As far as we're aware, they're being made aware, so then the RSP's shouldn't be signing up new customers.

Mr STEPHEN JONES: You've been doing this job for a long time, I know. In the ADSL days, it was not unknown where RSP's would sell ADSL services in congested exchanges, which leads one to assume that there is a conflicting interest—

Ms Corbin : Absolutely.

Mr STEPHEN JONES: I'm not saying it happens at the top table of the RSP's, but if there's a sales consultant somewhere down the line who's getting a bonus for selling an additional service, do you think leaving it to the retailer is going to be the best solution?

Ms Corbin : I would also hope that the regulators are going to take some interest in this. We know the ACCC is monitoring broadband and the fixed footprint of NBN. We would like to see that performance monitoring extended to fixed wireless and satellite. In the interim, we would really like to see that the ACCC might even look into what's happening in this space, because we know they've done that in the fixed network already. The consumers that are receiving these services via fixed wireless networks shouldn't be afforded fewer rights than anyone else.

Mr STEPHEN JONES: Can I ask about the wireless internet service providers? Your submission suggests that we should be doing spectrum sharing. Can you explain why you think that is possible? Are you aware of anywhere else where that has occurred? Why do you think that that is a successful model?

Ms Lawrence : We don't pretend to be experts on spectrum issues, because, as you know, they are incredibly complex, but we do have a real concern about the continuity of the valuable services that the wireless internet service providers are providing to regional Australia. That includes concern about their ability to plan for the future and their continuity. We understand that with the proposed options that the ACMA have recommended and the government has accepted there's going to be an eight-year period until they necessarily have to vacate or whatever the 3.6 gigahertz spectrum. We are very concerned about that being done in a way that is sympathetic to their interest and maintains a degree of competition. We're concerned that they're not monstered out of the market by the big players, because they really do provide a very valuable service to the community and they need certainty for their future planning and their investments.

Mr STEPHEN JONES: Does ACCAN have any suggestions to this committee about what government should do to ensure that they aren't monstered out of the market and that service continuity exists for the customers?

Ms Lawrence : We consider that there would be the potential for a greater role for the ACCC to assess the competition impacts in spectrum decision-making. The ACMA does take it on board to some extent, but we think that this needs to be brought to the fore more, because these companies do not have the kind of bargaining power in the market that the bigger entities have. Without the championship of a competition regulator, they're unlikely to be able to be heard.

CHAIR: Thank you very much. Thank you both for your evidence today.