The alliance's chief executive John Stanton said small ISPs, whose performance was not monitored, were worried they would lose customers to bigger providers that were monitored.

The government announced that the ACCC would monitor the speeds of some 4000 random NBN users to determine what speeds were being provided by different ISPs who were selling NBN packages.

"Although the ACCC has told industry today that it doesn’t yet know how many service providers will be included in the regime, it has previously indicated that it expects this will be limited to something like the five largest players,” Stanton said.

"The regulator, which exists to promote competition, needs to ensure that it does not engineer the opposite outcome."

He said the ACCC had a dilemma: it could include more ISPs, "but at the expense of sample sizes and therefore also at the expense of the accuracy and reliability of the published data".

"Or it can restrict the number of ISPs and risk hurting the smaller players in the market. Or it can blow out the costs of its regime and pile further expense on to consumers."

Stanton said the ACCC had not said whether there would be more consultation with industry about the monitoring programme – "something that industry sees as vital if the regime is to provide accurate information and hope to meet its stated objectives".