Australia's consumer watchdog will hold a public inquiry into the standard of the National Broadband Network's wholesale service after a dramatic rise in the number of customer complaints.

ACCC chairman Rod Sims said there were issues with how quickly customers were activated, how promptly faults were fixed and how dispute resolution was handled, including compensation for customers.

"They're issues that up until now have been left to commercial negotiation between the NBN and its wholesale customers — Telstra, Optus etc," he told The World Today.

"We've now formed the view that that's not working appropriately."

Last month the Telecommunications Industry Ombudsman revealed an increase of more than 160 per cent in NBN complaints over the past financial year — from 4,448 to 11,773.

Mr Sims said while NBN pricing was regulated, service standards were not.

"We need to adopt a more normal regulatory approach and regulate some of those service standards," he said.

The ACCC said it would call for public submissions to the inquiry early next year.

The inquiry comes after a federal parliamentary committee, stacked in favour of Labor, recommended new regulations be introduced to bind NBN Co to fault repair timeframes and minimum performance standards.

It called for customers to be appropriately compensated when benchmarks were not met.

The ABC's Four Corners last month highlighted the digital divide the NBN was creating in communities under the Coalition Government's multi-mix technology rollout, which includes copper wire and pay TV cables.

Prime Minister Malcolm Turnbull, who was communications minister under the Abbott government, said he had inherited a "calamitous train wreck" from Labor and that it was a mistake for the NBN to have been set up as a new company.

The ACCC said improvements to NBN Co needed to be made now before the scale and pace of the network's rollout increased.

"We're hoping that with an intervention we can bring about some change fairly quickly, because what we all want is the NBN to be a success in terms of delivering good speeds and having a good consumer experience," Mr Sims said.

The ACCC said the inquiry would likely wrap up by December 2018.