NBN Co opposes regulating NBN service pricing

NBN Co opposes regulating NBN service pricing

NBN Co says regulatory determinations on pricing by the ACCC could have unintended consequences

Credit: Dreamstime

NBN Co has strongly opposed the Australian Competition and Consumer Commission’s (ACCC) prospect of regulating prices of entry level National Broadband Network (NBN) services

In a statement, NBN Co said it was opposed to the prospect of ACCC pricing regulation on the basis that “there is no market failure requiring regulatory intervention,” and further pointed out that many NBN retail plans provided higher speeds and unlimited data at comparable or lower cost compared to legacy ADSL/ADSL+ plans. 

The ACCC has voiced its concerns in the past on potentially ‘unfair’ NBN prices for consumers on basic speed packages, in a move that could limit NBN Co’s ability to set its own wholesale prices.

ACCC chair Rod Sims previously stated its concerns that NBN Co’s wholesale pricing has resulted in unfair outcomes for consumers that have no need for, or do not want, higher speed plans. 

In response ACCC launched its Pricing Inquiry and has now made the submissions public. 

Prior to this, NBN Co held a direct consultation with retail service providers, resulting in the introduction of a 12/1 Entry Level Bundle discount in October.  This enabled RSPs to use the wholesale ELB construct to develop and market affordable 12/1 broadband plans with either capped or uncapped data inclusions. 

NBN Co said it was confident that its recent approach to pricing and proven track record of progressive wholesale pricing changes and additional data inclusions comprehensively address any concerns the ACCC may have.

Accordingly, nbn’s discounting approach sits within the principles accepted by the ACCC under the SAU. 

“There is no evidence to suggest that adopting an arbitrary retail price point as the basis for ACCC intervention on wholesale entry level pricing would lead to efficient outcomes for customers, or even be passed on to them,” An NBN Co spokesperson said.

“NBN Co will continue to work with RSPs and monitor the market to continue to promote the best outcomes for customers and RSPs, while also ensuring the company’s investment incentives are not undermined.

"Any proposed regulatory determinations on pricing by the ACCC could have unintended consequences to the detriment of customers, anchoring pricing and incentives around retrospective views of internet usage, and unfavourably and disproportionately skew the business case for future network investment towards entry level broadband plans.

Furthermore NBN Co said price regulation would also impede NBN Co’s ability to recover its costs and repay Australian taxpayers.

“It would also undermine NBN Co’s ability to support the cross-subsidy required to support non-commercial services in regional and remote Australia. It also weakens our ability to invest in network upgrades in the future as demand for data increases,” the spokesperson said. 

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