ACCC warns NBN over cutting entry-level plans

ACCC boss Rod Sims in his Sydney office. Picture: John Feder


ACCC boss Rod Sims has warned NBN Co against pulling the plug on entry-level plans as the company continues discussions with the telcos on wholesale prices.

“NBN Co’s wholesale prices have to make sure entry level services remain viable,” Mr Sims told The Australian. “A consumer should be able to move from their existing ADSL services to a 12 megabits per second (Mbps) service at no extra cost. The elimination of the 12Mbps and 25Mbps services is a big issue for us; they cannot be removed.”

NBN Co and the telcos have once again locked horns over wholesale pricing, with Telstra boss Andrew Penn last week calling for cuts to wholesale prices.

In addition to price cuts, Telstra wants the NBN to offer a $10-a-month voice-only service for customers wishing only to operate landlines and a discounted service for low-income and vulnerable Australians.

The current wholesale pricing model underpins NBN Co’s business case. But Mr Sims said consumers should not be forced to pay higher prices just to make the NBN viable.

“The government can’t sanction people to pay for higher-speed services,” he said.

“The 12Mbps service has to be priced as an anchor as consumers migrate to the NBN, so people pay more as they get more.

“We are in detailed discussion with NBN Co on the issue.”

The regulator’s latest snapshot of the NBN market shows 12 per cent of homes on the NBN still aren’t getting their maximum plan speed. With more than one in 10 connections not performing to their plan speed, the report shows service quality dipping during the busy period (between 7pm and 11pm).

Vocus consumer brands Dodo and iPrimus, along with Exetel, have been highlighted by the ACCC for consistently failing to meet their advertised download speed claims during busy hours.

“We will be discussing these results with Dodo/iPrimus and Exetel, including whether their advertised speed claims should be immediately revised in light of these results,” Mr Sims said.

Dodo has already been on the receiving end of penalties from the ACCC over dodgy claims about its entry-level NBN plans.

From November 2015 to March 2018, Dodo advertised its NBN broadband plans, including those with maximum speeds of 12Mbps, as being “perfect for streaming”.

The entry level plans are unsuitable for high-quality streaming and Dodo is giving refunds to about 16,000 customers as part of a court-enforceable undertaking made to the ACCC.

According to the ACCC report, telcos delivered average download speeds of between 80.4 and 86.7 per cent of maximum plan speeds in busy periods.They delivered between 82.2 per cent and 87.6 per cent of maximum plan speeds overall.

Mr Sims said the ongoing speed testing by the ACCC was forcing telcos to improve their services. “Measuring Broadband Australia continues to make a vital contribution to fostering competition and improving consumer outcomes by bringing much-needed transparency to the broadband market,” he said.

He said the program could benefit from more volunteers to broaden its coverage. “This program would not be possible without the support of our volunteers Australia-wide who have agreed to host a white box on their home broadband connection,” he said.


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