Aussie Broadband ramps up pressure on NBN ahead of Pricing Review

March 25th, 2021.

Aussie Broadband today described the proposed changes in NBN’s 2021 Pricing Review as ‘inadequate’ and said they do not reflect Australia’s increasing demand for data.

Managing Director Phillip Britt said he was disappointed, and added that the proposals were not even remotely close to what the company is looking for.

“Due to the significant growth the industry has experienced in the last 12 months, and the fact that usage has not returned to pre-COVID levels, we believe that the proposed changes are wholly inadequate to support the needs of the RSP’s and ultimately, Australian broadband users,” he said.

Phil noted that by the time the proposals come into effect in May 2022, traffic would be significantly higher again.

Pre-COVID, the industry saw an increase in average broadband usage by 16% year on year. During 2020, this growth had accelerated to an average of 27%.

“What we’re seeing here at Aussie Broadband is actually 35% above industry usage, and as a result, this is putting even more pressure on our margins,” Phil said.

Figure 1: Historical trend of the average CVC per user (source: NBN Wholesale Market Indicators Report, ACCC )

In a written submission to NBN, Aussie Broadband proposed a three-phase solution which it believes will help support the needs of the industry and broadband consumers. These are:

  • Phase one: Reinstate a COVID-19 style rebate – to give RSPs the certainty and confidence to continue to facilitate growth in the market and promote high speed services to the benefit of all.
  • Phase two: Work towards increasing the bundled CVC allowance for high-speed tiers to further encourage RSPs to provide quality services to end users. The company believes they should include an allocation of 10Mbps of CVC per TC-4 high-speed bundle (100/20Mbps and up).
  • Phase three: Scrap CVC entirely and move to a single access charge based on the speed tier chosen, with no usage or CVC component. The company pointed out that many other countries operate this way, including New Zealand.

Phil also warned that while usage continues to rise every year, and NBN still charges for bandwidth volume in the form of CVC, providers have no choice but to raise retail prices or reduce service levels.

“The telco industry has effectively come off 12 months of not having to worry about CVC, other than network traffic during COVID,” he said.

“The NBN proved during the pandemic that it completely supported the needs of both the industry and consumers, and we’re looking for this support to continue. We believe this is in the interest of all Australians,” he said.

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