ACCC moves quickly to retake control of NBN pricing

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ACCC moves quickly to retake control of NBN pricing

Could ultimately end the era of "sugar hit" discounts.

NBN Co, retail service providers and the Australian Competition and Consumer Commission will attend a roundtable in June to kickstart the conversation on long-term NBN pricing.

The announcement came hours after NBN Co said it would not try to run a consultation on long-term pricing itself but would ask the ACCC to run the process instead.

The move fast-tracks discussions that NBN Co had earlier sought to delay until FY23, drawing considerable ire from the internet industry.

“This is the start of a long reform process that would effectively put NBN pricing under the ACCC’s regulatory umbrella, and would improve access pricing for NBN Co customers,” ACCC chair Rod Sims said in a statement.

“Until now, access pricing has largely been developed by NBN Co, so the prospect of bringing this work squarely within the remit of a special access undertaking with effective ACCC oversight is a very significant change.

“As a first step, we are seeking contributions from NBN Co, access seekers, retail service providers and other interested stakeholders so their views can be considered as the undertaking is being developed.”

Changes to wholesale pricing should have required ACCC involvement all along through an arrangement known as the special access undertaking or SAU.

But the SAU also allowed NBN Co “to use temporary discounts to implement pricing adjustment to address short term challenges.”

The ACCC’s - and the industry’s - problem is that NBN Co implements all its price changes through temporary discounts, which can be changed or retracted equally quickly.

Some RSPs have likened the constant stream of discounts to “sugar hits”.

The ACCC said NBN Co had committed to lodge a revised SAU within 12 months.
This will include long-delayed changes that cover the multi-technology mix (MTM) used in the rollout; the current SAU is only good for the fibre-to-the-premises (FTTP), wireless and satellite footprints.

There had been a long process over several years to update the SAU, but the ACCC and NBN Co could not agree on terms.

NBN Co ultimately withdrew [pdf] and said it would resubmit an amended SAU “as soon as practicable”.

The ACCC said it is taking registrations from RSPs for the roundtable discussion. 

NBN Co changes course

NBN Co's chief customer officer Brad Whitcomb told iTnews that the company's own pricing consultation had produced eagerness from a number of retailers "to start in on the conversation on what that alternative [wholesale pricing] model might look like."

Most RSPs were clear in this regard even before NBN Co's pricing consultation began, seeking a single flat-rate charge for NBN services, instead of a charge comprising fixed and variable components, the total cost of which was harder to predict.

Whitcomb said NBN Co's original plan was to "get feedback from retailers, get the best and brightest ideas out there about alternative models, [and then] synthesize that ourselves."

"We’ve communicated to the retailers in the past that any fundamental change to our model would of course need to involve the ACCC so then we would go down that path with the ACCC," he said.

"We’re [now] basically trying to shorten that process by saying rather than run our own consultation with retailers for the next couple of months, we would go directly into a multi-party discussion with retailers, the ACCC, other interested stakeholders and NBN Co to see if there is an alternative model that would meet all of our requirements."

Whitcomb said that NBN Co had always been "open minded" to alternative pricing models, as long as they helped the company maintain its revenues and other characteristics of the NBN around customer experience and competition.

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