NBN prices to ‘double over the next decade’

A redacted submission shows prices for entry level plans will climb as high as $104 per month, which retailers have called ‘a slap in the face’ for consumers.

NBN Co CEO Stephen Rue at their offices in North Sydney. Britta Campion / The Australian

NBN Co wants to lock in price rises until 2040, and double the price of entry-tier plans over the next decade, as part of a redacted submission published by the Australian Competition and Consumer Commission (ACCC) on Monday.

NBN‘s submission, known as the Special Access Undertaking (SAU), is set to provoke an angry response from telcos, and from many consumers who are facing cost of living pressures amid higher interest rates and rising inflation.

“It is difficult to forecast exactly how quickly and by how much the maximum allowable cost to retailers to access the entry level speed tier would increase over the remainder of the SAU term should the SAU variation be accepted,” the ACCC wrote in a paper published on Monday.

“Applying NBN Co’s current forecasts the maximum allowable cost to retailers to acquire the entry level speed tier would double by around 2033 and continue to increase towards $104 per month in nominal terms by 2040.”

Aside from price hikes, NBN is also looking to axe controversial CVC pricing in favour of a ‘pay as you go’ model for retailers, but only for higher-tier speed plans.

It‘s also seeking to bring fibre-to-the-node and other copper-based technologies in to create a single regulatory framework covering all network technologies. The current SAU only applies fibre-to-the-premises, fixed wireless and satellite technologies.

NBN Co submitted a redacted version of the paper in April but its release was delayed until after the election.

The push for a price hike is likely to be poorly received by retailers. A TPG spokesman said, “The only thing clear from NBN’s convoluted pricing model is that internet services are going to get more expensive for Australians in the future.

“This proposal will effectively make entry level broadband in Australia a thing of the past and is a slap in the face for those who rely on affordable broadband to stay connected for work, study and play.

“The NBN’s pricing proposal can be summed up as price hikes and no improvements.”

Andrew Sheridan, Optus vice president of regulatory and public affairs, said NBN Co’s price proposal would hit everyone’s hip pocket.

“Retail providers like Optus will have no choice but to pass proposed cost increases onto our customers, knowing that many are already feeling the pain of rising household costs,” he said.

“The new government has an opportunity to refocus NBN Co’s priorities towards its core objective of ensuring all Australians have access to fast broadband, at affordable prices, and at least cost.”

The ACCC, which has to approve any changes, will now kick off a public feedback period with telcos, households and businesses.

“The Special Access Undertaking exists to promote competition and efficiency in Australia’s broadband market, to the benefit of households and businesses,” ACCC Commissioner Anna Brakey said in a statement.

“The variation will influence the price, quality and range of broadband offers in the market for the next two decades. Before we decide whether to accept NBN Co’s proposed variation, we are conducting a public consultation to hear from the retailers who sell NBN services, other service providers, and households and businesses that rely on the NBN for their broadband.”

A NBN spokesman said the company was unable to comment until it has met with the new relevant incoming ministers.