Wednesday, 04 November 2020 10:12

Benefits to NBN broadband customers from pricing, service standard improvements, says ACCC Featured

ACCC Chair Rod Sims ACCC Chair Rod Sims

Lower entry-level prices and other proposed improvements to NBN wholesale arrangements are in the long term interests of Australian broadband customers, according to a new report from the Australian Competition and Consumer Commission (ACCC)

The final report for the ACCC’s NBN Access Pricing and Wholesale Service Standards inquiries finds these new arrangements will promote the long term interests of broadband consumers, and balance the competing business interests of NBN Co with those of NBN access seekers.

NBN Co has agreed to implement the pricing and service standard improvements as part of its next Wholesale Broadband Agreement (WBA4).

“These improvements represent significant change from what was originally on offer when the ACCC’s access determination process started,” ACCC Chair Rod Sims said.

“These new arrangements will allow for more affordable entry level products for consumers who are happy with pre-NBN speeds, and promote competitive prices for the higher speeds made possible by the NBN,” ACCC Chair Rod Sims said.

“Higher rebates for consumers will provide stronger incentives for NBN Co to meet reasonable service standards and address individual cases of poor service outcomes.”

NBN Co will implement the measures through its wholesale commercial agreements with NBN access seekers, which either sell NBN services directly to consumers or on-sell them to other retail service providers.

The measures agreed to by NBN Co include:

  • further reductions in the price of NBN Co’s entry-level access bundle
  • greater product and pricing certainty through additional protections against the withdrawal of bundle access products, and price caps and minimum CVC allowances
  • stronger and more effective wholesale service standards that include rebates that accrue on a daily basis for late connections and fault rectifications
  • higher rebates for missed appointments
  • improved commitments and information on service speed performance, and
  • extension of rebates to TC-2 services for small-medium businesses.

“We expect the NBN Co’s commitment to provide certainty over access charges, which are the most significant costs facing retailers, will reduce barriers to entry and encourage greater competition in retail markets,” Sims said.

The ACCC’s report found that NBN Co’s commitment to include the measures in its next wholesale broadband agreement meant regulatory action through a Final Access Determination is not required at this stage.

“We will be watching NBN Co’s implementation of these arrangements very closely to ensure these measures achieve their intended objectives. This will also inform our consideration of arrangements beyond the term of the next wholesale agreement,” Sims said.

“It is important to note that the revised access arrangements do not provide a direct prohibition on NBN Co effectively reverting to a heavy reliance on short term discounts in future.

“The underlying concerns we have previously stated on the use of discounts remains and is contrary to the initial intention of the Special Access Undertaking (SAU), which was intended to provide a high degree of long term certainty,” Sims said.

The final report released onWednesday concludes the NBN Wholesale Service Standards Inquiry and the NBN Access Pricing Inquiry, which the ACCC has been conducting since 2017 and 2019 respectively.

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