ACCC to allow ISPs to pass broadband levy to users

ACCC To Allow ISPs To Pass Broadband Levy To Users

The ACCC1 has decided to allow non-nbn high-speed broadband providers to pass the cost of the proposed rural broadband levy on to their customers. The regulator’s final decision on the regulation of high-speed internet services will permit non-nbn network operators to increase prices to compensate for the government’s proposed Regional Broadband Scheme (RBS) charge of at least $7.30 per connection per month. This marks a reversal of the previous suggestion of requiring competing providers such as Telstra2, TPG3 and Vocus4 to swallow the cost.

“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.”

The RBS will be used to help fund nbn co’s rollout of the nbn to regional areas via the fixed wireless and satellite components of the national network. Regulated prices for wholesale access to non-nbn services have meanwhile been set in line with nbn prices and will change with nbn prices over time. Initial prices for providers other than Telstra will be $27 per port per month, plus between $8 and $17.50 per Mbps per month for aggregation to a point of interconnection (POI).

Telstra’s fibre network prices will be $16.03 per port per month in zone 1, which primarily consists of CBD and urban areas, and $21.10 per port per month in the predominately regional zone 2, plus $29.27 per Mbps per month for aggregation and a $20.69 per month wholesale line rental service.

The ACCC said the different costs for Telstra fibre network reflect the cost of separating the networks from Telstra’s legacy network systems, as well as the prospect of the fibre networks being transferred to the nbn in the future.

“Prices will reflect the growth in traffic across the high-speed internet sector, which will continue to drive down the average cost of supplying services,” Sims said.

“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.”

Very small broadband providers with fewer than 12,000 customers will not be regulated under the new regime, with the ACCC finding that it would represent an unreasonable burden with little to no benefit for customers.

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