ACCC to look into affordability of 12/1Mbps NBN plans

Regulator worried people cannot get a basic NBN service at the same pricing level as ADSL.
Written by Chris Duckett, Contributor

The Australian Competition and Consumer Commission (ACCC) has launched an inquiry into the lower end of the NBN market, with a particular focus on the basic 12/1 speed tier that NBN offers.

The regulator said in a statement on Monday that it is worried people cannot get a basic NBN service at the same pricing level as prior ADSL services.

"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 action by the consumer watchdog follows NBN releasing its latest consultation paper in September, which put forward the idea of offering new 100/20Mbps, 250/25Mbps, and 1000/50Mbps speed tiers.

"We have decided to commence the inquiry because of concerns that NBN Co's wholesale pricing has resulted in inefficient and unfair outcomes for consumers who have no need for the higher speeds that the NBN makes possible," the ACCC said in a discussion paper.

"These concerns stem from NBN Co's wholesale pricing changes in late 2018, and the subsequent withdrawal of basic speed retail plans that have left these consumers at risk of being unable to obtain an NBN service at a similar price and quality of their ADSL service. These consumers are nonetheless required to migrate to the NBN in order to keep their home service active."

The paper pointed out with NBN discounting being used to get users onto the 50Mbps tier and the creation of new pricing bundles, the government-owned wholesaler required retailers to count bundled services on a separate CVC allowance on each point of interconnect.

The ACCC said it raised the question of whether the bundles could "result in discriminatory pricing outcomes contrary to NBN Co's non-discrimination obligations".

NBN was formally warned last week for discriminating between retail service providers (RSPs) when supplying infrastructure to business customers.

The ACCC found that from at least January 2018, the company provided Macquarie Telecom with different commercial terms compared to other RSPs.

The consumer watchdog said on Monday it was concerned that NBN was continually using discounts that it could unilaterally withdraw to adjusting pricing

"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," Sims said.

The inquiry will also look into the service transfer and reversal fees that NBN charges.

Although NBN is looking into its entry level pricing, the ACCC said it would undertake its own inquiry now so that a final access determination could be put in place, if needed, when NBN's current wholesale pricing agreement expires in November 2020.

"As part of our strong commitment to the entry level, price-sensitive segment, we introduced a modified 12/1 Entry Level Bundle discount on 1 October 2019," an NBN spokesperson said. "The discount provides RSPs with the flexibility to develop affordable 12/1 broadband plans for a similar price to legacy products, with either capped or uncapped data inclusions.

"To increase future certainty for retailers and customers, we've also announced that we will publish a rolling two-year roadmap of future pricing across all wholesale speed tiers."

Last week, Vocus hit out at NBN for the tactics it has used to ramp up its number of enterprise customers, calling on the government to hand the national wholesaler a new statement of expectations.

CEO Kevin Russell said the government should make it so that NBN cannot enter into tenders or contracts with end-users, cannot negotiate buying commitments or terms of service with customers, cannot sign confidentiality agreements with users, nor recommend retailers to enterprise customers.

"NBN should be a good thing for the Australian Enterprise market -- but only if it operates within its original remit as a wholesale-only, transparent, and non-discriminatory operator," Russell said.

"Right now, NBN's behaviour in the market is in danger of undermining and penalising those who have invested and, want to invest, to support infrastructure competition."

Updated at 12:57pm AEDT, 14 October 2019: Added NBN comment.

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