NBN Co flags data capacity charges cap for resellers

NBN Co is proposing to improve industry certainty around data usage by introducing the soft cap on variable charges for eligible retailers.

NBN Co is proposing a soft cap on variable data capacity charges for retail service providers (RSPs) in its latest pricing review consultation paper. 

The National Broadband Network (NBN) builder’s Pricing Review 2021 Consultation Paper 2 is the latest in a series of industry consultations aimed at hashing out wholesale pricing and terms with RSPs. 

The Pricing Review 2021 Consultation Paper 2, released on 28 April, takes into consideration industry feedback received in 14 submissions from major internet retailers, representing 95 per cent of the retail market, and key consumer advocacy groups during a five-week, first-round consultation period. 

Along with the soft cap, the consultation paper also proposes more generous data inclusions and will progress long-term pricing reform through a Special Access Undertaking (SAU) variation consultation with industry and the Australian Competition and Consumer Commission (ACCC). 

Responding to feedback, NBN Co said it was proposing to improve industry certainty around data usage by introducing the soft cap on variable charges for eligible retailers, subject to a fair use policy.  

The offer is intended to increase retailers’ cost certainty in the potential event that data usage increases significantly, the company said. NBN Co is proposing to run the offer from December 2021 to December 2022. 

Moreover, NBN Co said it planned to add more value to the two-year Bundles Roadmap by increasing the Connectivity Virtual Circuit (CVC) inclusions across most wholesale bundles discounts, increase inclusions in the Business Bundles discounts and bring forward inclusions for the 250/100 Mbps speed tier. 

Under the changes, CVC inclusions in the 250/100Mbps speed tier will increase from 3.5Mbps to 5.25Mbps effective from 1 December 2021 and will be available as a Business Bundle with enhanced service level eSLA12 included, with a further rise to 5.75Mbps from 1 May 2022. 

For the 500/200 speed tier, CVC inclusion will increase to 6.25Mbps from 1 May 2022 and will be available as a Business Bundle with eSLA12.  

CVC inclusions for the close to 1000/400Mbps speed tier will increase to 7Mbps from 1 May 2022 and will also be available as a Business Bundle with eSLA12. 

At the same time, NBN Co will proceed with the planned increases in CVC inclusions for the 50/20 Mbps, 25/5 Mbps speed tiers and Fixed Wireless Plus Bundles in the May 2021 roadmap, which will range from 11 per cent to 20 per cent of additional capacity.  

The company brought forward significant additional CVC inclusions for selected higher speed tiers in December 2020, in response to the effects of the pandemic.  

In the May 2022 roadmap, NBN Co is proposing to make no change to the Discount Bundle effective charges but will be providing between 0.1Mbps to 0.75Mbps of additional CVC inclusions to the 25/5Mbps and higher speed tiers.   

CVC inclusions for the Home Ultrafast speed tier, meanwhile, will increase from 6.25Mbps to 7Mbps from May 2022 and capacity for the Home Superfast will rise from 5.25Mbps to 5.75Mbps, with any unused CVC able to be shared across other speed tiers.  

Additionally, NBN Co intends to initiate an SAU variation process that will also serve as the vehicle for further consultation on long-term pricing reform. 

This process will also provide the framework to discuss key aspects of the SAU variation, such as inclusion of select NBN access technologies currently not included in the SAU, applicable price controls and the possible development of a targeted, long-term, low-income offer, the company said. 

“The proposals put forward in Paper 2 today are the latest in a series of steps to deliver more value and certainty to customers and the industry around wholesale and retail pricing of NBN services,” said NBN Co chief customer officer Brad Whitcomb. 

“We are proposing to offer retailers a soft cap to limit the potential cost of additional capacity. We see this offer serving as an important bridge between the two-year roadmap and the potential for longer-term pricing changes via the SAU process. 

“In response to the industry’s strong desire for nbn to implement long-term pricing changes quickly, we are initiating an SAU variation consultation that will involve the ACCC. We believe this is the best way to progress this important industry conversation,” he added. 

NBN Co intends to provide a discussion paper to industry outlining the key elements of its proposed approach to the SAU variation in May 2021.