ACCC drafts pricing for non-NBN super-fast broadband services

The Australian Competition and Consumer Commission (ACCC) has announced its draft decision on pricing for access to super-fast broadband services (SBAS), local bitstream access services (LBAS), and Telstra fibre access broadband (FAB) services during the National Broadband Network (NBN) rollout.

The ACCC said the new pricing is designed to ensure retail service providers (RSPs) and consumers do not pay more for access to these NBN-like services than they would for NBN services.

“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 super-fast broadband sector, which will continue to drive down the average cost of wholesale aggregation services,” ACCC Chairman Rod Sims said on Monday.

“We expect that these wholesale price changes will likely lead to lower prices for retail customers of super-fast broadband providers.”

The pricing will see SBAS and LBAS services charged at AU$27 initially per port per month for speeds of 25/5Mbps, with subsequent pricing to be the price of the NBN’s AVC TC-4 25/5Mbps product price as amended in future. The initial aggregation charge per 1Mbps per month will be AU$15.25, and will then be subsequently amended as per the pricing for the NBN’s connectivity virtual circuit (CVC) TC-4 product.

Telstra FAB services, meanwhile, will be priced according to their zones, and will be updated each year.

In the Superfast Broadband Access Service and Local Bitstream Access Service Final Access Determination joint inquiry: Draft decision report [PDF], the ACCC explained that the pricing will support increasing data usage over the next five years.

The pricing terms will apply to TPG’s VDSL network across the Australian Capital Territory, hybrid fibre-coaxial (HFC) networks in regional Victoria, and fibre-to-the-basement (FttB) networks in capital cities; networks belonging to Vocus, OPENetworks, LBN Co, and Opticomm; and Telstra’s fibre-to-the-premises (FttP) South Brisbane and Velocity Estates networks.

Excluded from the declaration are providers supplying SBAS and LBAS services to fewer than 12,000 end users — reducing it from the draft decision last year that saw RSPs with 20,000 or less end users being excluded — along with HFC networks that are due to be transitioned over to NBN‘s ownership and services provided exclusively to business customers.

The regulator emphasised its reliance on NBN’s CVC wholesale pricing, which reserves a consumer’s bandwidth from the point of interconnect, and sees dimension-based discount pricing structure to encourage more dimensioning of CVC capacity — or greater usage of data.

This decision comes despite the CVC having been subject to widespread industry criticism, with Shadow Communications Minister Michelle Rowland in October saying the CVC in combination with the access virtual circuit (AVC) charge actually discourages usage of the NBN at a time when data demand is increasing.

In a submission to the ACCC’s previous enquiry on SBAS services, OPENetworks said that competition would only not be damaged if NBN was required to sell CVC access at regulated prices to other wholesale providers; if the entire CVC market outside of the NBN footprint was regulated so that LBAS pricing plus CVC charges were within the former pricing construct; if NBN disclosed specifically where its network footprint will extend over the next three years; and if NBN offered a common gateway and an aggregation point for all RSPs to offer wholesale only access providers without charge.

The ACCC said on Monday that these requests were beyond the scope of this review, however, but would be considered in its review of the overall telecommunications industry.

The pricing determinations will expire on July 28, 2021, and the ACCC is seeking submissions on the draft decision until February 17.

The ACCC decided in July last year to regulate wholesale SBAS access for the next five years, declaring all pre-2011 non-NBN fibre access networks with speeds of more than 25Mbps.

SBAS services include FttP, FttB, HFC, fibre-to-the-node (FttN), and fibre-to-the-distribution-point (FttDP) networks, with the ACCC excluding mobile broadband services from the declaration.

Satellite and fixed-wireless services have now been included in the pricing determination, allowing RSPs to levy these services provided NBN’s prices have no embedded levy in them.

The ACCC made the original SBAS inquiry in response to concerns raised by the Vertigan Review that there was the possibility of smaller monopolies and a lack of competition occurring outside of the federal government’s NBN to provide access to high-speed broadband networks.

In October last year, the ACCC also made a draft decision to continue regulating wholesale ADSL internet services for the next five years after announcing its inquiry into deregulating ADSL services in July in response to the NBN rollout and the uptake of mobile services. A final decision on ADSL regulation is due within the next few months.