NBN affordability under scrutiny

The Australian Competition and Consumer Commission (ACCC) will consider whether Australians are able to access basic broadband plans at fair and affordable prices.

The inquiry will examine wholesale prices paid by retail service providers (RSPs), which use the NBN to supply residential-grade broadband services.

The ACCC’s inquiry will focus on prices for basic speed broadband products offering 12/1 Mbps and will consider whether regulation is needed to ensure a smooth transition for consumers to the NBN from legacy services such as ADSL.

“We have concerns that NBN Co’s wholesale pricing has resulted in unfair outcomes for those consumers who have no need for, or do not want, higher speed plans,” ACCC Chair Rod Sims said.

“Most consumers have no choice but to migrate to the NBN if they want to keep their home service active but are at risk of not being able to obtain a comparable NBN service at a similar price to their ADSL service.”

The inquiry will assess whether NBN Co’s most recent pricing offers (in particular, NBN Co’s recent changes to its Entry Level Bundle) will allow RSPs to offer attractive retail NBN plans at ADSL-like prices.

The ACCC first raised these concerns publicly in April 2019, after NBN Co’s wholesale pricing changes in late 2018 led to the withdrawal of many basic speed retail plans.

The ACCC is also concerned about NBN Co’s continued use of discounts to adjust access prices.

NBN Co can withdraw these discounts ahead of a notice period that it sets itself. The ACCC is concerned that these arrangements may not be providing enough certainty for RSPs as they develop and promote their retail offers.

“This lack of certainty creates unnecessary risks that may ultimately be passed on to consumers, who may face higher prices and reduced quality and product offerings as a result,” Mr Sims said.

The inquiry will also look at NBN Co’s service transfer and reversal charges. These fees are applied each time an existing service is transferred between access seekers.

The ACCC considers these charges can discourage the efficient use of service transfer processes, impeding competition and impacting consumers.

“We want to hear from interested parties as part of this public and transparent inquiry process,” Mr Sims said.

“Right now, we are approaching a peak period for NBN service activations and mandatory migrations. The window for many consumers to migrate to the NBN without losing their existing fixed line service is closing.

“We are interested in what changes can be made quickly to promote competition and the interests of consumers, while allowing NBN Co the opportunity to grow its revenues, invest in its business and earn an appropriate rate of return,” Mr Sims said.

Have you migrated across to the NBN? How much do you pay for the service? Have you signed up for a basic package?

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Written by Ben

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