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NBN pricing a concern for ACCC

Date

Peter Cai

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The ACCC is concerned about several proposals NBN Co is putting forward for its future regulations, including pricing, flexibility and reliability.

Australian Consumer and Competition Commission chairman Rod Sims said he was broadly happy with the new regulatory framework submitted by NBN Co to the ACCC after it withdrew its special undertaking.

However, Mr Sims said he had doubts about parts of NBN Co's new undertaking - especially in relation to pricing.

The government's broadband company submitted the undertaking in December last year, but withdrew it in September after it became clear that it would not be accepted.

Mr Sims said that both the ACCC and NBN believed the new undertaking had "the right overall framework" for regulation, and that "before, there was too much discretion for NBN."

"Most people can get 12 megabits per second services," he said. "We want to make sure that when they transition to NBN, they are not paying any more than they pay now and that price goes down over time."

Matt Healy, head of regulatory affairs at Macquarie Telecom, said the industry broadly welcomed the ACCC's decision but still needed to resolve some issues.

"There are still real issues to be addressed around how we develop and price new products and who has say over that," Mr Healy said.

"There needs to be crystal clear articulation of when the ACCC can step in and settle disputes between NBN Co and industry."

Also high on Mr Sims' radar is protecting the levels of services to NBN's customers, which will then sell services to millions of Australians.

He asked: "Is the level of service description adequate for the needs of retailers who are going to be selling NBN products to you and I?"

Given the long time-horizon of NBN's project, which will last more than 30 years, the ACCC wants to make sure that there is enough flexibility in the new regulatory system so it can step in to resolve potential future disputes between NBN and its retailer customers.

"You can't anticipate everything over 30 years," Mr Sims said, "have we got the flexibility to deal with new issues as they rise through time."

NBN Co said in a statement that it welcomed the release by the ACCC of its discussion paper as the next stage in the consideration of the Special Access Undertaking.

"NBN Co has pledged to freeze the wholesale price of its key consumer and business products for five years, and to peg any future price rises to below the rate of inflation," NBN Co said in a statement.

7 comments

  • "Most people can get 12 megabits per second services".
    I'm not sure whether to laugh or cry. Maybe Sims is statistically correct but hundreds of thousands, possibly millions - including people in major population centres - can't currently get anything like this speed.

    Commenter
    Jon
    Date and time
    November 13, 2012, 1:30PM
    • We have to break the privatisation mentality in Government - and that is all the major parties Federal.state & local Government.We have to reclaim our utilities and run them as utilities not price gouging corporations owned by the Government that is no different to Privatisation.; The NBN should be a Government dept and its only interest in providing a service the best possible at the lowest possible . Australians should expect no less but they have been conditioned for so long - Hawke & Keating showed that you can just treat voters and party members with contempt and all cabinets have been the same since

      Commenter
      RonaldR
      Location
      Cockburn Central
      Date and time
      November 13, 2012, 7:50PM
      • Sims must be using the term most in an absolute way ie over 50%. Or maybe he is only referring to the areas that were double served in the 90s as Telstra and Optus laid cable or hung it from power poles. These role outs stopped between 5 and 15 KMs from the CBD, depending on which city you lived in If you live in a house that has been built in a new infill area in a suburb built in the last 15 years - say Waverley park in Melbourne (25K from the cbd, but the geographical center of Melbourne), or a house further out- anywhere really where the lines went underground,it is likely that you can not get 12 MPS. In fact many people can not even get 1.5mps ADSL 1. And if they can get something slightly faster it is often expensive because Telstra has limited or no competition. It is even worse if you are on a sub exchange. We have the ridiculous situation where houses being build now in subdivisions such as Waverley Park, while houses 1-5 years old will have to wait until 2014 or longer. New houses, full of professionals and students, who have to pay for a phone line, slow internet, and DSL Foxtel if they want subscription TV. So much for the knowledge economy....

        Commenter
        Greg in Mulgrave
        Location
        Mulgrave
        Date and time
        November 13, 2012, 8:22PM
        • by the time this thing gets up and running, i'm pretty sure it will be out of date with any new technology,what a crock!

          Commenter
          pfft
          Date and time
          November 13, 2012, 8:55PM
          • NBN... Waste of money, pls tell why me its the job of govt to run an Internet company?? I'm sure they will do a bang up job. No way this will be a FAIL!!!!!!

            Commenter
            Pull da plug...
            Date and time
            November 14, 2012, 7:29AM
            • This NBN does not have a hope of being profitable if it has to charge less than equivalent schemes today, and is starting to look more like a Ponzi scheme than a serious investment.

              Further more, the Enron type financing scheme which wraps this financial ball of poison in a separate "off the books" company is going to explode in a massive budget write down at some point. I guess Labor hopes the Coalition will be in power then.

              Commenter
              jeffhosk
              Location
              Sydney
              Date and time
              November 14, 2012, 7:59AM
              • As a senior citizen who is very keen to see that Labor’s vision for the NBN not be watered down because it is the most important piece of new infrastructure ever seen so far in our history and is so vital for our future, I am concerned about these comments.

                I tried to find out more about the writer to ascertain whether this article could be biased, but that information was not immediately available to me.

                I can imagine that once everyone is part of this wonderful new super highway the need for public servants to travel by air to many destinations around the country will no longer exist. This means savings of time, energy and resources and will allow many people more time with their families. Perhaps more children will be taken to more leisure time activities. So this could mean more employment for music teachers, athletic coaches and so on.

                Please let us all use our imagination and skills to shape our new world!

                Commenter
                EM
                Date and time
                November 14, 2012, 8:38AM
                Comments are now closed
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