Affordability of basic NBN products to be examined

A wifi modem

The ACCC will consider whether Australians are able to access
basic broadband plans at fair and affordable prices, as part of an inquiry into
NBN wholesale charges launched on Monday.

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.

The inquiry will allow the ACCC to make a final access
determination (FAD), should one be needed, ahead of the expiry of the current
wholesale broadband agreement at the end of November 2020.

Any FAD would provide access seekers with certainty about the
terms and conditions of the access to the NBN that would apply should they be
unable to reach a new commercial agreement with NBN Co at that time.

The ACCC has released a discussion paper examining these issues
and seeking views on those and other related issues.

Further information is available at Inquiry
into NBN access pricing

ACCC Media Release:  187/19