NBN to scrap controversial usage charges, but telcos urge caution

“There also continues to be a lack of accountability within the NBN for the significant time, effort and expense wasted across industry over the past 14 months to address the failings of the previous SAU proposal. The fact NBN did not share its new proposal with industry prior to distributing to the media first, highlights its views on so-called collaboration.”

The federal government last month confirmed NBN Co would remain in public hands “for the forseeable future”, a move which forced it back to the drawing board on a regulatory mechanism known as the Special Access Undertaking, which determines the quality of its services and how it charges wholesale customers such as Telstra, Optus and TPG Telecom.

Under a previous proposal, NBN Co planned to lock in price rises until 2040, and double the price of entry-tier plans over the next decade. Australia’s telcos have long argued the pricing structure of the NBN hurts margins and makes it difficult to predict monthly costs. The new proposal suggests removing the connectivity virtual circuit (CVC) charge, which increases with peak internet usage periods, by mid-2026.

But despite the initial drop in pricing, consumers and businesses will have to brace for yearly price increases linked to inflation, which NBN Co claims are needed to hit financial targets.

The proposal also includes larger discounts to wholesale prices for high-speed tiers by mid next year. The reductions are between 8 per cent and14 per cent across the various speeds when compared with the initial proposal NBN Co put forward in March.

NBN Co also released a set of benchmark services standards on end-use connections, service transfers and performance incidents, and proposed giving new powers to the competition regulator to reset the NBN’s revenue and pricing framework from 2032.

Optus’ vice president of regulatory and public affairs, Andrew Sheridan, said the paper gave the telco reassurance NBN Co was heading in the right direction. If NBN and industry continue to work constructively, Optus is confident we can provide Australian customers with the outcomes they deserve,” Sheridan said.

A Telstra spokesman said there were positive steps but some areas needed attention, including service quality.

“Our ambition through the process will continue to be ensuring the wholesale terms deliver better outcomes for our customers, sustainable industry economics and increased use of an important national asset,” the spokesperson said.

The discussion paper is subject to regulatory and industry consultation later this month.