Legacy broadband wholesale prices to stay fixed for 5 years: ACCC

Wholesale prices charged by Telstra for existing non-NBN services to remain unchanged for five years, ACCC rules.

Some users will remain on their legacy ADSL services until 2022.

The competition regulator has opted to maintain the status quo on wholesale prices charged by Telstra for existing non-NBN services, closing the door on any meaningful cuts over the next five years.

The Australian Competition and Consumer Commission’s directive, issued on Friday, will see no increases to prices on seven regulated fixed line wholesale services, provided predominantly by Telstra, until June 30 2024.

The NBN rollout is scheduled to be completed by June 2020. However, many consumers will remain on their legacy ADSL services, with full migration to the NBN unlikely to be complete before 2022.

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Most consumers have 18 months to switch from Telstra’s legacy networks to the NBN once their area is made ready to connect to the network.

After the migration, only a small number of services will remain connected to these legacy networks.

Telstra had originally pushed to raise wholesale prices for the legacy services but changed its tune last year, telling the regulator it was happy to see the current pricing stay in place.

With most telcos now having more NBN than legacy ADSL customers the ACCC’s decision will be broadly welcomed by the industry.

However, it’s likely to provide fresh ammunition for telcos in their ongoing tussle with NBN Co on the prices it charges for wholesale access.

With legacy ADSL prices to remain constant for the next five years, telcos will use it to highlight the burgeoning gap between what they used to pay Telstra and how much they are currently having to pay NBN Co.

The ACCC’s decision will come into effect on November 15 and the regulator said its ruling should see wholesale prices for non-NBN fixed line services reduce in real terms over the next five years.

“Our decision will provide real price reductions and certainty for the industry in relation to voice and broadband services which are still being provided through Telstra’s copper network and other legacy infrastructure,” ACCC boss Rod Sims said.

“Although the NBN rollout is almost finished, RSPs will still need to use these legacy networks to provide services to some consumers for a few more years,” he said.

“Maintaining the current prices and other terms of access will give the industry some certainty and stability as the NBN migration continues.”