The report also noted the ongoing issues involving end customers’ experience with slower-than-expected internet speeds via NBN products, flagging potential problems with nbn’s Connectivity Virtual Circuit (CVC) pricing.
“From a consumer perspective, the ACCC has concerns that the level of CVC provisioning is contributing to poor speeds being experienced by households and businesses,” Sims said. “Retail service providers are also saying that CVC pricing is affecting the uptake of higher speed services by consumers.”
Additionally, as reported by ARN’s sister publication, Computerworld, the draft report touched upon whether the Government should consider whether nbn “should continue to be obliged to recover its full cost of investment through its prices”.
“A potentially significant factor contributing to these outcomes is that current average revenues per user (ARPU) for NBN services may not be sufficient to meet nbn’s long term cost recovery requirements,” the report stated. “One factor is that we are not seeing the degree of risk sharing and alignment of incentives we would expect in a well-functioning wholesale market.”
As such, the ACCC said that the Government could reconsider whether nbn should continue to be obliged to recover its full cost of investment through its prices via options that may provide it with greater flexibility regarding its cost recovery objectives.
“These could include direct budget funding arrangements for non-commercial services, debt relief measures or an asset revaluation. The latter step is consistent with that usually taken by private sector enterprises if and when business plans are not met,” the report said.
This comment comes just days after nbn CEO, Bill Morrow, raised the prospect of a wireless broadband network levy to help prop up the finances of the national network.
“The government has two options: to regulate to protect this model, or to realise that the NBN won't have the finances it thought and might require some off-budget monies to go in to make it happen,” he said,” Morrow said at the time.
Already, the Government has introduced a proposed “broadband tax” for fixed-line service providers. The ACCC said it does not consider the proposed charge should be extended to other substitute networks in the future, preferring instead that all non-commercial services be funded directly from the budget.
While the Government has said it has no plans to extend such a levy to wireless network operators, the prospect of writing down the value of the NBN or refinancing it has not been entirely dismissed out of hand.
Now, the ACCC is calling on industry and stakeholder feedback to inform the final report of its review into the local telco market.