The ACCC and NBN Co have denied allegations from sources within the telco industry that rollout of HFC technology was cancelled at the behest of the consumer watchdog.
Pitched by NBN Co as a “new initiative”, the company announced on Monday it would temporarily pause the rollout of its hybrid coaxial fibre (HFC) technology.
Network engineering and telecommunications expert Mark Gregory claimed the sudden announcement was triggered by an instruction from the Australian Competition and Consumer Commission (ACCC).
“It wasn’t NBN Co’s initiative. The ACCC told them to stop it,” Mr Gregory told The New Daily.
“At the same time, the ACCC told NBN Co, rather directly, to stop selling products to service providers that it couldn’t deliver.
“And that’s HFC, according to my sources.”
Initially, the ACCC did not deny these claims when contacted by The New Daily. Following publication of the story, the watchdog issued the following statement: “The ACCC has not directed NBN Co to cease providing HFC services.”
A National Broadband Network spokesperson also denied that NBN Co was “ordered” by the ACCC to stop the rollout.
The Turnbull government has blamed the delay on technical issues. It has not commented publicly on any role played by the consumer agency. HFC is a mix of fibre and coaxial cables – rather than the “full fibre” advocated by Labor and the Greens.
Mr Gregory said he believed the problems should have been addressed before the HFC rollout began.
“They should never have been connecting customers before they could provide the product they’re selling,” he said.
“NBN Co should be providing compensation to affected end users. Just as Telstra and Optus were made to compensate their customers for speeds they couldn’t get.
“In this case, it is not that the service providers aren’t providing enough capacity, but NBN Co providing inadequate infrastructure.
“The ACCC needs to investigate and force NBN Co to provide compensation.”
An ACCC spokesman said it did “not have a comment at this time” regarding whether it plans to compel NBN Co to provide compensation to affected HFC customers via their respective service providers.
The agency added it did not comment on potential investigations.
“The ACCC has announced a Broadband Performance Monitoring Programme that will allow the ACCC to determine if issues are being caused by the performance of the NBN, or by internet service providers (ISPs) not buying sufficient capacity,” the spokesperson said.
“The ACCC would be concerned by any market participant offering a service that it could not provide.”
NBN Co chief Bill Morrow said it was expected to take six to nine months to repair the issues on its HFC network, which uses existing pay TV cables.
Based on figures in NBN Co’s 2016 corporate plan, the HFC delay could cost up to $790 million.
Minister for Communications Mitch Fifield said the HFC problems were “very fixable”.
“There are some issues that are being addressed, which are readily fixable, to do with interference in terms of spectrum and also to do with some of the joints between the cable in the street and the cable that goes to the premise,” he told the Senate on Tuesday.
An NBN spokeswoman said the HFC delay would not cause further delays to the 2020 deadline for the overall rollout.
“[We] are not aware of any specific communication from the ACCC to NBN Co on this point other than the general industry guidance provided by the ACCC to retail service providers back in August,” she told The New Daily.
“End users are, as always, able to lodge a claim for compensation through their retail service provider.”
The HFC delay could lead to “delayed revenue” and an “increase in peak funding”, she said.
New Street Research estimated the company will be able to meet its FY20 financial target as long as it solves the HFC service issues by mid-2018.
Once HFC is rolled out, using DOCSIS 3.1 technology, it is expected to achieve speeds comparable to those attainable over fibre-to-the-curb.