Telstra, Optus, TPG, Vocus and Aussie Broadband slam NBN over planned price hikes in rare joint letter to ACCC

Australia’s major telcos say NBN’s planned price hikes – if successful – will worsen cost of living pressures and make broadband unaffordable for many Australians.

Telstra CEO Andrew Penn. Picture: NCA NewsWire/Gary Ramage

Australia’s largest telcos – Telstra, Optus, TPG, Vocus and Aussie Broadband – have written a rare joint letter to Australia’s competition watchdog, attacking NBN Co’s proposed price hikes and calling for a new regulatory probe for what they describe as the nation’s digital backbone.

The retailers said that should NBN Co’s proposed changes be accepted, there is a real risk that the network will become even more under-utilised, causing harm to consumers, the market and the economy.

NBN Co chief executive Stephen Rue. Picture: Britta Campion

The extraordinary missive comes after the ACCC earlier this week published a submission from NBN Co, known as the special access undertaking (SAU), that proposes locking in prices until 2040, and doubling the price of entry-tier plans over the next decade, along with other changes.

The ACCC is mulling a shake-up to NBN’s pricing structure that would shape the future of the $50bn project over the next decade.

“Australia has an opportunity to grow into a leading digital economy and digital society. The National Broadband Network is an important part of the telecommunications infrastructure that is the backbone of a future digital Australia,” the telcos write in the joint letter.

“For our digital economy to live up to its full potential, we need reasonable wholesale price levels, greater predictability, and better service quality from NBN Co.”

Optus CEO Kelly Bayer-Rosmarin. Picture: NCA NewsWire / Damian Shaw

The telcos contend that NBN Co’s wholesale prices will rise and increase every year at a rate higher than inflation, ratcheting up household cost of living pressures and making NBN high-speed broadband unaffordable for many Australians.

NBN Co’s returns will become excessive relative to the returns required to deliver efficient investment in infrastructure, they say.

“There have been many decisions in the past that have given rise to NBN Co’s inefficiently high cost, leading to NBN Co prioritising returns to its shareholders over outcomes to end users. NBN Co’s proposed changes continue its disregard to the legitimate needs of end users and retailers.

“The current process is not delivering optimal outcomes in the long-term interests of end-users. We therefore consider that greater regulatory intervention is required. We request the ACCC undertake a Part 25 inquiry and urgently develop an Access Determination that will establish a regulatory regime which promotes the interests of end users.”

TPG CEO Iñaki Berroeta. Picture: Adam Yip

Part 25 refers to the Telecommunications Act 1997, which allows the competition watchdog to hold public hearings and publish reports.

“We will consider the issues that the five retail providers have raised with us,” an ACCC spokesman said.

“The NBN underpins Australia’s digital future, and given the importance of the regulatory settings we encourage all interested parties to participate in the public consultation.”

NBN Co declined to comment.

“Such an Access Determination could prevent year-on-year wholesale price increases worsening cost of living pressures, encourages the future investment needed by the market, contributes to growth of Australia’s digital economy, and protects retailers from monopolistic behaviour,” the telcos wrote in the joint letter.

“If this cannot be achieved by November 30 or thereabouts, we request the ACCC consider issuing an Interim Access Determination to ensure end users do not suffer from the effects of NBN Co’s proposal to significantly increase wholesale prices.

“We believe the long-term interests of end users are paramount. Current and future end users should not be compelled to underwrite NBN Co’s inefficient historical costs and subsidise its entry into adjacent competitive markets. NBN Co has had more than enough time to engage meaningfully with the ACCC and industry.

“The proposed SAU variation is unsatisfactory. It is now time for the ACCC, working with the industry, to take the next step of designing and enforcing an alternative regulatory framework to that proposed by NBN Co.”