The government has asked the ACCC not to beef up NBN Co’s service standards until after the network is complete.

The Department of Communications said in a submission [pdf] to the NBN wholesale service standards inquiry that the existing rules “are not necessarily unreasonable”.

It acknowledged that retail service providers “may not always agree” with the efficacy of the standards.

But the department argued that it was "up to NBN Co to provide a rationale on why it has

chosen to include specific terms and conditions” in its wholesale agreement with RSPs.

“These need to be considered on their merits, and in the context of a network still under construction,” the department said.

“It may be that, when the NBN is complete, stronger connection and repair timeframes could be considered, for example, taking into account the greater availability of network infrastructure.”

Such a delayed response runs counter to Telstra’s submission to the same inquiry, which argues for “targeted” intervention by the end of June this year.

It also puts pressure on the ACCC, which has already publicly indicated it will act sometime this year.

The department urged a far more cautious timeline to be adopted, and for action only to be initiated “if it becomes apparent that the standards that apply in NBN Co’s new wholesale broadband agreement (WBA3) are ineffective.".

However RSPs argue this is already the case, though NBN Co claims its standards are workable and have been agreed with some give-and-take in a commercial negotiation process.

The ACCC inquiry is just one of several initiatives that will put pressure on NBN Co’s service standards - and the government has “suggested” the ACCC let measures “targeting consumer experience improvements … run their course” before weighing in.

In any event, action by the ACCC would not necessarily bring about customer experience improvements on the NBN, the department argued.

“The ultimate goal for all stakeholders is for NBN Co, RSPs and all other agents in the supply chain to improve their performance to deliver better consumer outcomes by addressing any deficiencies,” the department said.

“It is unlikely that this will be achieved by solely tightening the regulatory framework to mandate non-price terms in the supply of wholesale NBN services.

“Rather, industry, the government and regulators need to continue to work together to improve immediate industry processes and develop a robust longer term framework.”

The department was also largely dismissive of overtures by RSPs to have service level agreements (SLAs) set and to financially punish NBN Co if they were not met.

Telstra, for example, wants NBN Co to be punished with a flat-fee penalty if SLAs go unmet.

It is currently difficult for RSPs to even claim rebates from NBN Co for problematic activations, RSPs argue.

But the government dismissed the question of rebates.

“In practice, consumers will benefit most from having services rather than compensatory payments,” it said.

It also questioned where the money would come from to pay them.

“At its most extreme, higher penalties could raise NBN Co’s need for capital without improving outcomes,” the department said.

“Ultimately, either consumers or taxpayers funding the NBN would need to fund these penalties.”