The consumer watchdog is looking closely at the increasing number of consumer complaints about the NBN and has suggested federal government may need to slash its expected return from the network if pricing and speed issues continue.
The Australian Competition and Consumer Commission on Monday launched its draft report on the communications industry, which found consumers were concerned about connection and activation problems, as well as fault rectification and slow internet speeds.
ACCC chairman Rod Sims said a year-long study also uncovered concerns over wholesale costs that service providers incur to acquire NBN services, and the subsequent quality of services.
"In the medium term, if these issues persist despite improved advertising and pricing, the government should consider whether NBN Co should continue to be obliged to recover its full cost of investment through its prices," Mr Sims said.
The report said, at more than halfway complete, the NBN still faces "challenges" from future competition.
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The ACCC said consumers are finding it difficult to understand new broadband deals, making it increasingly harder for them to switch providers and find better plans.
"While we think it's great that consumers have a wide choice of plans, we want to ensure they have accurate information and tools to help them understand how to choose the best service for their needs," Mr Sims said.
The watchdog said the issues around the speed of NBN services can be addressed directly through improved information from retailers, who should also ensure their services operate in the manner advertised.
The ACCC expects to release a final report early next year.
