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"NBN tax" set to be passed on to end users

"NBN tax" set to be passed on to end users

High-speed internet providers get approval to pass on the proposed Regional Broadband Scheme charge to end customers

ACCC chairperson Rod Sims

ACCC chairperson Rod Sims

The Australian competition watchdog has granted permission for the proposed Regional Broadband Scheme (RBS) charge - dubbed by some as the "NBN tax" - to be passed on by telcos to end users.

The Australian Competition and Consumer Commission (ACCC) has revealed its final decision on the regulation of high-speed internet services supplied by non-NBN fixed line networks which, for the most part, supply high-speed internet services in new housing estates and apartment buildings in central city locations.

In a change from the previous draft decision, the ACCC has permitted the non-NBN networks to pass on the Government’s proposed RBS charge on their customer lines to help fund the supply of non-commercial regional fixed wireless and satellite services by the company behind the NBN rollout, nbn.

Broadly, the Commission ruled that non-NBN high-speed broadband providers now have a base regulation from which to conduct business.

In many areas, providers including Telstra,  TPG, Vocus, LBN Co, Opticomm, and OPENetworks supply internet services where the NBN does not offer services and provide customers in these areas with a limited choice of retailers of internet services.

The decision has set wholesale prices and other terms and conditions that are expected to provide customers with a larger number of retailers to choose from and deliver them better prices and services, the ACCC said.

The organisation released its draft decision in in January 2017. After proposing some changes to the draft decision pricing approaches, the ACCC released a further consultation paper in March 2017.

The ACCC said its final decision on the  final access determinations(FADs) takes account of submissions received on both the draft decision and the further consultation paper.

“Our view is that the regulated prices based on the NBN prices may not have allowed these network providers to recover their reasonable costs if they were also required to absorb the proposed RBS charge,” ACCC chairman Rod Sims said.

“One of our main aims has been to ensure that internet retailers and their customers supplied via the non-NBN networks will not be worse off than if they were supplied internet services by the NBN.”

“Consistent with our draft decision, the prices have been set in line with NBN prices and will change with NBN prices over time. Prices will reflect the growth in traffic across the high speed internet sector, which will continue to drive down the average cost of supplying services,” he said.

Under the final decision, the initial prices for providers other than Telstra will be $27 per port per month, plus between $8 and $17.50 per Mbps per month for aggregation to a point of interconnection (POI).

The ACCC said the aggregate price payable will vary by retail service provider (RSP) depending on the average amount of aggregation capacity that a RSP purchases per port.

Telstra’s fibre network prices for 2017-18 are $16.03 per port per month (Zone 1) and $21.10 per port per month (Zone 2) and $29.27 per Mbps per month for aggregation.

An RSP will also have to purchase Telstra’s wholesale line rental service, which is an additional $20.69 per month.

“We expect that these price changes will help deliver better service performance for customers of non-NBN networks as they will allow retailers to provide faster services at a lower average price,” Sims said.

The ACCC added that the very small providers of some high-speed internet services, supplying less than 12,000 customers, will not be regulated under this decision on the basis that it would apply an unreasonable burden to them with little benefit to customers.

Terms set in the final decision only apply if access providers and access seekers cannot reach their own commercial agreements on prices and other terms for the relevant services.


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Tags broadbandNBNaccchigh-speed Internet

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