The 'NBN Tax' Will Be Passed On To Customers

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The Australian Competition and Consumer Commission has made its final decision regarding the regulation of high-speed internet services supplied by non-NBN fixed line networks - and if they can pass the "NBN tax" charge to customers.

In a change from the draft decision, the ACCC is letting non-NBN networks to pass on the Government's proposed Regional Broadband Scheme charge on their customer lines to help fund NBN's supply of non-commercial regional fixed wireless and satellite services.

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The internet services subject to the decision are called the superfast broadband access service and the Local Bitstream Access Service. These are wholesale "superfast" fixed-line broadband services capable of download speeds of normally 25 Mbps or more. They are supplied on non-NBN networks and provide similar services to the NBN.

"Our view is that the regulated prices based on the NBN prices may not have allowed these network providers to recover their reasonable costs if they were also required to absorb the proposed RBS charge," ACCC Chairman Rod Sims said. "One of our main aims has been to ensure that internet retailers and their customers supplied via the non-NBN networks will not be worse off than if they were supplied internet services by the NBN."

Under the final decision, the initial prices for providers other than Telstra will be $27.00 per port per month plus between $8.00 and $17.50 per Mbps per month for aggregation to a point of interconnection. The aggregation price payable will vary by retail service provider depending on the average amount of aggregation capacity that a RSP purchases per port.

Sims says the prices have been set in line with NBN prices, and will change with NBN prices over time to reflect the growth in traffic across the high speed internet sector. Sims says this will continue to drive down the average cost of supplying services.

"We expect that these price changes will help deliver better service performance for customers of non-NBN networks as they will allow retailers to provide faster services at a lower average price."

The ACCC says the very small providers of some high-speed internet services (supplying less than 12,000 customers) will not be regulated under this decision on the basis that it would apply an unreasonable burden to them with little benefit to customers. Terms set in the final decision only apply if access providers and access seekers cannot reach their own commercial agreements on prices and other terms for the relevant services.

The networks largely supply high-speed internet services in new housing estates and apartment buildings in central city locations. In many areas they supply internet services where the NBN does not offer services and provide customers in these areas with a limited choice of retailers of internet services. The major providers of these services are Telstra (South Brisbane and Velocity Estates fibre networks), TPG, Vocus, LBN Co, Opticomm, and OPENetworks.

The ACCC says the decision sets wholesale prices and other terms and conditions "that are expected to provide customers with a larger number of retailers to choose from and deliver them better prices and services".

The full final decision can be read here.


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