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ACCC Investigates Affordability Of NBN Wholesale Prices

As part of an inquiry into NBN wholesale charges, the ACCC has launched an investigation on whether Australians are able to access basic broadband plans at fair and affordable prices.

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

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

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

“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.”

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

There are also concerns by the ACCC related to NBN Co’s continued use of discounts to adjust access prices.

In this case, NBN Co can withdraw these discounts ahead of a notice period that it sets itself, which the ACCC believes doesn’t provide enough certainty for RSPs as they develop and promote their retail offers.

The inquiry will also look at NBN Co’s service transfer and reversal charges, which the ACCC believes can discourage the efficient use of service transfer processes, impeding competition and impacting consumers.

“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.

“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.”

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.

Further information on the ACCC’s inquiry into NBN access pricing can be found here.

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