Archive for 13/02/2014

Launceston NBN Survival Information Night – 6 March

We are holding our first NBN Survival Information Night in Launceston at the Best Western Plus, Earl Street, Launceston. While the disconnection date for the parts of Launceston that are affected is not until the end of the year. There are so many businesses that are affected we will have to get started early!

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Telstra to announce ISDN replacement product on NBN

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I have heard informally from two sources within Telstra that they are expecting to announce a replacement ISDN product within the next few months, along with an 18 month switchoff timeline for ISDN. So what does this mean? If you are considering changing over to ISDN to escape the NBN Switchoff, this may not be such a good idea.

What is ISDN?

There is a Wikipedia article on it, but it is rather technical. For most businesses ISDN is just a different technology for bringing telephone lines into their premises. It is most often connected to an actual phone system, not just a regular phone. What is important is that ISDN lines are currently not included in the standard switchoff timetable.

There are actually two different ISDN products: ISDN2 (also known as BRI) and ISDN10/20/30 (also known as PRI). While they share some technological similarities, they are delivered in totally different ways. I am not clear at this stage which ISDN type they are replacing, however I would expect that it would be ISDN2, but it may be both types.

The reason ISDN has come to prominence around the NBN is that it is currently not included in the list of services that will be switched off around 18 months after the Fibre NBN is switched on in an area. Some providers, notable Telstra, have been suggesting that people change over to ISDN (which requires upgrading or replacing their telephone systems – usually at significant cost) to sidestep the switchoff. Telstra have also been using a ISDN product (they call a “data-only line”) to allow clients to use their existing EFTPOS, Alarms and Fax systems without modification.

What is the effect if/when this is announced?

Until it is announced it is unclear what the full effects will be. However the first effect is that ISDN will go into Cease Sale within the NBN Fibre rollout, meaning that clients will no longer be able to order a standard ISDN product, they must order this replacement product. It is also expected that any existing ISDN services will enter the timeline for disconnection – expected to be 18 months after the announcement.

Now the important thing to understand is that this is a replacement product. In other words, the goal will be to allow clients to unplug their phone system from their existing ISDN lines and plug them into a new box that is connected to the NBN. However as with the standard telephone line replacement we can expect some issues:

  1. Quality: This is unknown at this point. Due to the way ISDN works (it is a digital product), it is likely to not have some of the issues of the standard telephone replacement product (namely echo and poor sound quality). However they could have some similar issues such as dropping calls and intermittently not working.
  2. Changeover issues: The new product will almost certainly have similar management issues during the changeover – namely losing your services for a period of time and not working as expected. You will likely have to spend money with your telephone system company so that they can help manage this, they may have to change settings within your phone system.

What if I am about to switchover to ISDN?

If you already have ISDN services, then unless you have another compelling reason to upgrade your phone system, you may as well stay on ISDN at least until the situation becomes clear.

However if you are considering changing to ISDN to escape the switchoff, then you might want to reconsider doing this, particularly if you have to spend significant amounts of money on this (on upgrading your phone system to support ISDN for example). There is a risk that your money spent will be wasted, and at least you will have to go through another switchover process 18 months or so down the track. It might make more sense to spend this money upgrading or replacing your phone system so that it natively supports the NBN way of sending voice – namely VoIP.

What is also unclear is whether Telstra will offer this product at wholesale to other providers. Unlike standard telephone lines, Telstra have never been required (by law) to offer ISDN services to their wholesale partners. When you use another provider (such as iPrimus, Commander, AAPT along with my company, Launtel), they then buy these services from Telstra Wholesale.

If Telstra decide not offer the service at Wholesale or only to certain providers – and this is likely, because they can reasonably argue that other providers should be creating their own NBN products, then you might find yourself severely limited in your choice of what provider to get your ISDN from. If you don’t like the ISDN replacement product (or price), you may find yourself having to upgrade or replace your phone system a second time.

It would be prudent for businesses to understand the future risks of going down the ISDN path, given that we know it will be an obsolete product.

Legal issues regarding Telstra position on contracts and the NBN

Michael Patterson (Telstra’s General Manager for Tasmania) and I have been exchanging emails regarding the position for customers who currently have a contract with Telstra and are faced with compulsory disconnection of copper phone and internet services due to the NBN rollout. In particular whether Telstra can use the threat of Early Termination Fees (ETFs) to force clients to transition to an NBN service provided by Telstra and indeed take out a new contract.

Here is my reply to his email:

Hi Michael,

Thanks for coming back to me. You have clarified the position regarding ETFs if services are disconnected on the Disconnection Date (i.e. you won’t charge them). As promised I will publish your letter on the website (http://nbnsurvival.info) along with this reply.

What concerns me is that while you have said you are committed to supporting your small businesses customers as they transition to the NBN, the unwritten proviso in this is that you are only willing to do this if your customers take on the NBN service with you and sign whatever new contract you require.

At the end of the day, you (Telstra) have announced to your customers that you are disconnecting their existing contracted service before the end of the contract, in other words you have given notice that you will be breaking the contract, not the customer. Don’t forget most customers would be only too happy to keep their existing copper services, you are just not allowing them to do this due to your agreement with NBNCo and the ACCC (which the customer is not a party to).

I note that you are making your customers a new offer to replace their services, but as we all know there are several deficiencies in this new product (alarms, EFTPOS, fax etc do not work properly over the phone service you provide), along with the very real risk of significant downtime during the transition. I do not believe you can force customers to take this replacement service. See the Unfair Terms in the TCP Code 4.5.3d

It is completely unreasonable to require a customer to take on a new contract for their NBN service to escape the ETF on the old one. This also contravenes the TCP code (see unfair terms – 4.5.3c). I do not believe you could even force a customer to take on a new contract that has the same end date as the old one (which would be a more reasonable position).

To require customers to keep their services with you right up until the Disconnection Date in order to escape the ETF is also not reasonable. Given that you have announced you are breaking the contract, businesses have to do whatever they deem fit to preserve their services (plan the transition, port numbers etc).

A much more reasonable position from Telstra, is that a client is required to continue to pay for their contracted service until the Disconnection Date, but allow them to actually disconnect before that time (so they can port numbers for example). I doubt even this would be enforceable in law given that you are creating significant costs (management, new equipment etc) for businesses by breaking the contract in the first place. Indeed your customers are required in law to take reasonable steps to limit their costs (which you could be liable for) due to your announced contract breach (for example by reducing their downtime costs by porting numbers before the Disconnection Date).

I am not a lawyer, but I do make it my business to understand the law around telecommunications. I believe the various consumer laws and the TCP code are very clear on this. However I am open to hearing from you that I have got something wrong.

I look forward to hearing from you,

Damian

Michael Patterson (Telstra) responds regarding contracts and the NBN

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Yesterday I received an email from Michael Patterson following my coffee with him two weeks ago. He had promised to give me a business briefing on Telstra’s position regarding contracts, however he pretty much just restated the original position without any legal explanation. He did however clarify the situation around Early Termination Fees should a service be compulsorily disconnected on the Disconnection Date (the date that all the copper services in an area are due to be disconnected) – they wouldn’t charge one.

Here is his email:

Hi Damian

I am writing to respond to your comments about transitioning our small business customers to the NBN.

We’re committed to ensuring that our small business customers are supported as they prepare to move to the NBN. We encourage our customers to contact us directly with any questions or concerns about how the NBN will impact the services they have with us, because every customer scenario is different.

There are a variety of Telstra on the NBN business plans and solutions available for small businesses moving off copper and we’re working with our customers to ensure they are well informed about their options. Customers who decide to cancel their contract within its term and before the Disconnection Date of their copper services are subject to early termination charges. In most cases, we will waive these early termination charges for customers transitioning to an NBN service with us. We are required to disconnect customers who have not migrated to the NBN by the Disconnection Date of their copper services if they don’t have a valid NBN order in progress with us. And, in this instance, on disconnection no early termination charges will be charged.

You can contact me with any questions.

Regards,

Michael Patterson  Area General Manager
Tasmania  |  Telstra Country Wide  |  Telstra

Here is my response.