ACCC greenlights NBN Co pricing and rebate changes

ACCC greenlights NBN Co pricing and rebate changes

To come into effect from 1 December

Credit: NBN

NBN Co has agreed to lower entry-level prices and higher consumer rebates following a push by Australia's consumer watchdog to overhaul its wholesale agreement. 

The Australian Consumer and Competition Commission (ACCC) has given the green light to NBN Co's next Wholesale Broadband Agreement (WBA4) as the builder agrees to several measures that are “in the long term interest of Australian broadband customers”.

NBN Co will implement the new agreement on 1 December, with the changes due to take place through via NBN access seekers — providers that sell NBN services directly to customers, or those that on-sell them to other retail service providers. 

ACCC chair Rod Sims claimed the changes will appeal to those at both ends of the speed spectrum.

“These new arrangements will allow for more affordable entry-level products for consumers who are happy with pre-NBN speeds, and promote competitive prices for the higher speeds made possible by the NBN,” he said. 

“Higher rebates for consumers will provide stronger incentives for NBN Co to meet reasonable service standards and address individual cases of poor service outcomes.” 

Indeed, the ACCC claims the changes will “balance the competing business interests of NBN Co with those of NBN access seekers”. 

Leading the list of changes is a reduction in NBN Co’s entry-level broadband access bundle to $24.70 from December 2020 to April 2021, followed by another reduction to $22.50 from May 2021 to November 2022. 

By comparison, the bundle is currently priced at $26.60. 

Access seekers are also expected to see additional certainty for the long-term longevity of access products through more protections relating to the withdrawal of access bundles and price caps and Connectivity Virtual Circuit (CVC) allowance floors to apply to said bundles. 

Charges for service transfers and reactivations will be both rebalanced to $5, as opposed to October 2019's charges of $22.50 and $0, respectively

Failed connections are also expected to incur no wholesale charges, while late connections and fault rectifications were recommended to carry rebates of $7.50 and $15, respectively, as opposed to the current one-off $25 rebate. 

Additionally, rebates for missed appointments will increase to $50, and then $75 for every subsequent missed appointment, instead of the current rebate of $25. 

The approach to underperforming service speeds will also be revised, including rebates and “more accurate and timely speed performance information. 

Rebates will also be extended to business grade (TC-2) services, which allows for small- to medium-sized businesses to be eligible for rebates due to poor service. 

Furthermore, the ACCC advocated for improvements to operational procedures and reporting arrangements. 

“We will be watching NBN Co’s implementation of these arrangements very closely to ensure these measures achieve their intended objectives. This will also inform our consideration of arrangements beyond the term of the next wholesale agreement,” Sims said. 

“It is important to note that the revised access arrangements do not provide a direct prohibition on NBN Co effectively reverting to a heavy reliance on short term discounts in future.  

The underlying concerns we have previously stated on the use of discounts remains and is contrary to the initial intention of the Special Access Undertaking (SAU), which was intended to provide a high degree of long term certainty.” 

The inquiry into NBN Co’s pricing and performance has been going on since October 2019, with the ACCC advocating for the raise to the missed appointment rebate in April this year. 

The consumer watchdog also called for feedback on NBN Co’s wholesale arrangement proposal in August. 

“These improvements represent a significant change from what was originally on offer when the ACCC’s access determination process started,” Sims added.

NBN Co previously revealed discounts and rebates for its retails on higher speed plans in October, which are also included as part of WBA4.

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