ACCC seeks to match ‘superfast’ broadband prices to NBN charges

Competition body releases draft decision on wholesale pricing for networks that compete with the NBN

The Australian Competition and Consumer Commission has released its proposal for wholesale pricing and conditions that will apply to so-called ‘superfast’ — 25 megabits per second or faster — broadband networks that are independent of the National Broadband Network.

The ACCC in July 2016 announced that it would ‘declare’ the superfast broadband service, which enables it to force network operators to allow other telcos to sell services over their infrastructure.

Following the declaration of the service, the competition watchdog launched a consultation on pricing. Today the ACCC proposed base wholesale pricing of $27 per port per month for a 25/5Mbps service and a $15.25 per Mbps per month capacity charge — with the pricing aligned with NBN’s AVC and CVC charges. The ACCC said it anticipates the pricing will match changes in the NBN charges over time.

The pricing covers a range of networks, including TPG’s fibre to the basement (FTTB) network and non-NBN networks rolled out in new housing estates.

“A key objective has been to ensure that retail service providers and customers supplied via SBAS [superfast broadband access service] and LBAS [Local Bitstream Access Service] networks would not be any worse off than if they were supplied by the NBN,” the ACCC’s chairperson, Rod Sims, said in a statement.

“The draft 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 superfast broadband sector, which will continue to drive down the average cost of wholesale aggregation services.”

“We expect that these wholesale price changes will likely lead to lower prices for retail customers of superfast broadband providers,” Sims said.

Under the draft decision released today by the ACCC, regulated pricing for Telstra’s fibre access broadband services in South Brisbane and Velocity Estates is treated differently.

“This is because these networks were built to work with Telstra’s legacy copper-based systems and because they are expected to move to the NBN within the next few years,” the ACCC’s draft decision states.

“These prices have been benchmarked to the service-specific costs of the wholesale ADSL service, to which the FAB service has similar characteristics.”

The proposed FAB pricing cuts the aggregation charge by $12.62 per Mbps per month from current levels, the ACCC said.

It was TPG’s FTTB rollout that initially raised concerns about the potential to undercut the business case for the NBN by targetting high-value and/or low-rollout-cost metro areas with a high-speed broadband network that took advantage of a loophole in the so-called ‘anti-cherrypicking’ rules designed to protect the NBN.

The anti-cherrypicking rules restrict the circumstances under which new superfast NBN-like broadband infrastructure can be rolled out.

The ACCC is accepting submissions on its draft decision until 17 February. A final decision is expected by June this year.

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Tags Australian Competition and Consumer Commission (ACCC)NetworkingNational Broadband Network (NBN)national broadband networkbroadbandNBN

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