Fairer internet prices delayed again as ACCC rejects NBN Co offer

Families juggling the ongoing cost of living crisis have been given a temporary reprieve from potential NBN bill hikes, thanks to Australia’s biggest consumer watchdog – but it’s still up in the air as to whether prices will eventually skyrocket.

The Australian Competition and Consumer Commission (ACCC) has rejected NBN Co’s latest proposed changes to the Special Access Undertaking (SAU), which sets the terms and prices under which internet providers can access and sell NBN services. This is the second time in 12 months that the ACCC has turned down NBN Co’s suggested SAU updates, continuing a back-and-forth that first began in March 2022.

How will the ACCC’s decision impact NBN prices?

NBN Co’s first SAU proposal included major pricing reforms that sparked concern from both the ACCC and NBN providers. One of the major SAU changes that’s long been pushed for by telcos was the end of connectivity virtual circuit (CVC) charges, which determine how much bandwidth a retailer can offer customers. 

NBN Co offered to scrap CVC costs on faster speed tiers in favour of a flat monthly charge, but multiple industry stakeholders predicted this would actually lead to ongoing price increases. The ACCC’s own forecast suggested that the change could see wholesale NBN prices doubling by 2033, even for the cheapest speeds. 

The ACCC sent NBN Co back to the drawing board, and the broadband network submitted a follow-up proposal in November. However, this amended draft still received criticism, with major providers including TPG Telecom and Vocus (Dodo/iPrimus) again anticipating it would lead to immediate price increases for customers.

Both retailers were concerned that NBN Co’s suggested changes would provoke yearly price hikes, and cause price-sensitive customers to be pushed down to lower-cost, but slower speed tiers. TPG Telecom predicted that the popular NBN 50 speed would increase in price to match current NBN 100 costs, and argued for periodic wholesale price rises to only be permitted every three to five years.

Customer advocate The Australian Communications Consumer Action Network (ACCAN) also stated that affordability should be NBN Co’s priority, and supported the introduction of a product targeted towards low-income customers.

After reviewing submissions from telcos and industry bodies, the ACCC has ultimately rejected NBN Co’s November proposal. ACCC Commissioner Anna Brakey said there were still changes that NBN Co needed to make to its SAU submission to promote the long-term interests of NBN customers.

“The ACCC can only decide to accept or reject NBN Co’s variation proposal, and our draft decision today is to reject this proposal. However, in making our decision, we have identified a number of aspects of it that reflect issues raised in the ongoing industry consultation process and which represent a significant improvement on the current SAU and earlier variation proposals,” Ms Brakey said.

“We have also outlined some specific issues NBN Co could address to accelerate the pathway to an acceptable variation.”

Related: How to save money on your internet bill

Big three telcos praise ACCC decision and push for affordable NBN plans

Telstra, Optus and TPG Telecom have already responded to the ACCC’s decision, and all three telcos are firmly in favour of further amendments to the proposed SAU.

An Optus spokesperson told Canstar Blue that the company supports the ACCC, particularly in light of household cost of living pressures.

“It is important NBN’s proposed pricing and service standards deliver services that promote digital inclusion and equitable access to affordable and reliable broadband services to meet the current and future needs of Australian households and sets the industry up for success,” the spokesperson said.

TPG Telecom’s general manager of external affairs, James Rickards, also emphasised the importance of fair NBN pricing.

“It is critical the ACCC and NBN do not pass up this opportunity to ensure essential broadband services remain affordable for all Australians as they restart this process yet again,” Mr Rickards said.

Finally, a Telstra spokesperson said that the company will continue to prioritise service quality and affordability for customers, adding “We’re pleased the ACCC has recognised this in its decision and we look forward to the SAU process being closed out with these considerations in place as quickly as possible.”

Taking on board the responses from the ACCC and retailers, NBN Co has confirmed it will submit a revised proposal in June. If the ACCC accepts, the amended SAU will apply through to 2040.

“Australia needs an efficient, reliable and affordable national broadband network to be a world-leading digital economy,” Ms Brakey said.

“This is critical, national infrastructure and to accept a variation we must be satisfied it promotes the long term interests of Australians.”

Compare NBN plans

With wholesale pricing rule changes again delayed, it might be a while before we know if NBN costs are set to rise or fall. In the meantime, you can compare what’s on offer across the four most popular NBN speed tiers below.