ACCC endorses network congestion pricing

ACCC endorses network congestion pricing

Summary: Australian Competition and Consumer Commission chairman Rod Sims has welcomed the suggestion that ISPs begin charging customers for speeds, not just data.


Australian Competition and Consumer Commission (ACCC) chairman Rod Sims has welcomed a proposal by Telstra for internet service providers to begin looking at charging for services on data speed tiers.

Telstra's group managing director of products, marketing, and innovation, Kate McKenzie, this week called for the telecommunications industry to debate the merits of network operators managing traffic by charging customers based on the speed and time they wanted to use the service rather than just the data.

Sims said in a speech to the Australian-Israel Chamber of Commerce in Brisbane on Thursday that he advocated the telcos looking into traffic management practices.

"As a long time advocate of congestion pricing for a range of other infrastructure networks, I welcome this call," he said. "Australians are consuming more audiovisual content than ever before, and providers are diversifying the ways in which they deliver the content depending on the type, scale, and reach of the services they are providing."

"These developments have the potential to stimulate pro-competitive outcomes, and increase consumer choice and quality of experience. This additional content, however, requires capacity, which can cause network congestion."

But he warned that while traffic management tools could be helpful to reduce congestion, it could also harm competition from over the top players whose traffic would be regarded as a lower priority.

"Where traffic management practices are implemented, however, network providers should ensure that such practices are transparent and customers can easily understand the implications of these practices on the service they receive," he said.

"In addition, given the rate of change in these markets and the potential for some players to use market power in one market to gain leverage in another, markets can tip toward anti-competitive structures and outcomes in a very short space of time. There is a risk that the current diversity of services and participants could quickly dissipate or consolidate."

Telstra has begun trialling throttling peer-to-peer services for ADSL customers in a small part of Victoria. The company did not reveal this to the public, however, until it was leaked to the media.

Telstra was also the subject of another concern of Sims. He said that this year, the ACCC will review fixed services and determine for how much longer the ACCC needs to regulate the services over Telstra's copper network.

The rollout of the National Broadband Network (NBN) in its current form will see customers move off the copper network over to the NBN. While this would remove the need for the network to be regulated at the end of the NBN rollout, Sims noted that Telstra may seek to argue that wholesale ADSL prices need to rise in order to accommodate the reduction in customers on the network.

"Telstra is likely to argue that, with the NBN rolling out, prices will need to rise as fewer services will be supplied over the same infrastructure," he said. "Alternatively, competitors may argue that the values of Telstra's assets need to be reduced to reflect their increasing obsolescence."

He noted, however, that this all may change after the September 14 federal election.

Topics: Telcos, Networking, NBN, Australia


Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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  • Not convinced

    It's not clear from the article whether the speed fees are in addition to the quota fees, but I assume they will be.

    I have NO idea how the hell this will work. We already have pricing tiers based on speed, so what is this?

    Either way any bet the small e-mail and browser users will not see a decrease in their prices to the detriment of the IPTV and Torrent paying more.

    They will keep the base tiers the same and simply find a way to charge more for the faster users.

    For goodness sake - how about ISPs just go back to their namesake? INTERNET SERVICE PROVIDERS. Just provide an internet service. That's it.

    I don't want On-Peak, Off-Peak, Freezone, this is free, that is not, p2p throttled or not.

    Just provide the service - that's what we pay you for. That's all we want you to do.

    The whole reason we have this argument in the first place (we can't provide you the advertised speed because your node is congested, RIM, pair gain), is because they've gotten away this whole "up to 24Mbps" crap, which could mean you only get 2Mbps, yet pay the same as the guy 3 blocks down not on a RIM.

    If the capacity is not up to scratch, then it is the ISP's problem, don't make it ours, or even worse, charge us for your problems! This crazy ISP mentality has gone on for long enough. We've become so desensitized to this rubbish, we grin and bear it but let's not forget, it's plain old fraud.

    How would the ISP's like it if the powers that be stuck up for ME for a change, and instead of $70p/m, which is what they're paying for the same service 3 blocks down, except at up to 18Mbps, whereas I'm stuck on about 6Mbps, I could say, "well, I only get 33% of the speed, so how about from now on I only pay you $24p/m. THAT seems fair to me, but you watch them stand up if THAT became truth.
  • +1..I'm not convinced either!

    Another rip off grab by the world famous rip off merchants...TELSTRA.

    They can't guarantee any ADSL speeds, for all the reasons we all know so well & they continue to make excuses for the problems due entirely to their lack of sufficient maintenance in the copper we pay for already.

    To add insult to injury, TELSTRA doesn't even provide enough inter exchange trunk capacity, especially to rural & country exchanges, support the users on their networks. Do they have any plans to upgrade these trunk routes...NO THEY DO NOT and I've argues at length with their engineering department about the problem.

    Leave it to TELSTRA to dream up more ways to fleece the users.

    If they want to charge us for speed on DSL, the ACCC had better make sure we are allowed to sue the ISP if they don't provide it!! they don't & won't!

    Other countries have this provision, so why don't WE?