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NBN Co Tells ACCC It Cannot Recover Costs

The NBN Co. has warned the ACCC that it simply can’t earn enough to cover the costs of its $57 billion roll out, and needs to expand its services.

NBN points to “significant competition in the enterprise, business, and new developments markets from existing infrastructure providers, and also faces increasing competition from 4G, 5G and fixed-wireless services in the residential market” and feels the ‘Special Access Undertaking’ needs to be updated to reflect this.

“The fact that almost one in three households (4 million out of 12 million) is not using the NBN today, illustrates the dynamic nature of the market,” it said.

The SAU is a key part of the regulatory framework that governs the prices NBN can charge retail phone and internet companies. This was agreed upon in 2013 between NBN Co. and ACCC.

Retail service providers are seeking a flat rate pricing structure for all users, which removes a Connectivity Virtual Circuit charge for data downloads.

NBN have fought this by releasing a third-party study, by consultants Accenture, which deems such a structure untenable – and unfair to low-data users.

“Overall, removing CVC will reduce choice, increase entry-level prices, reduce fairness and result in fewer consumers on the NBN network,” the report said.

“Low data users will be most adversely impacted. Removing CVC will also have several broader market impacts, including curtailing NBN Co’s pricing flexibility and ability to respond quickly and effectively to market changes whilst balancing its pricing objectives.”

NBN said earlier this week that an estimated 69,000 to 170,000 Aussies would no longer be able to afford the NBN under a flat rate pricing structure.

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