The ACCC has tentatively approved two consecutive price hikes for NBN services occurring within a span of six months, indicating progress in its assessment of the revised special access undertaking (SAU) submitted by NBN Co.
Consecutive Price Increases for NBN Services Possible, ACCC Signals In its recent statement [pdf], the commission expressed cautious optimism, suggesting that the updated SAU draft might secure approval by the year’s end, contingent on another round of consultation with industry stakeholders.
The ACCC stated, “Our current view is that the August 2023 SAU variation proposal is a material improvement from its [previous] proposal.”
It further noted, “The ACCC is mindful of the extensive consultation undertaken to date on this matter and a desire from industry to reach a decision. The ACCC currently intends to make a final decision as soon as practicable this year.”
However, the report’s tone displayed some reservations, using terms such as “appears to address areas of concern,” “seems to be consistent with the relevant key outcomes,” and “appears to have addressed our draft finding…”
Two unresolved matters raise uncertainty about industry reactions. One involves modifications to the 50Mbps and below speed tiers, where NBN Co supports a proposal disliked by both Telstra and Optus and only conditionally endorsed by other internet retailers.
Another contentious point is the ACCC’s acceptance of NBN Co’s ability to implement two successive price hikes for users within the initial six months of the new agreement, assuming it secures approval this year.
The commission acknowledged that “several” industry players advocated for the removal or postponement of a July 1, 2024 price increase, given that prices will already rise upon the SAU’s implementation.
The ACCC recognized that this would lead to “price increases within six months of each other, on both December 1 [2023] and July 1 [2024].”
NBN Co justified retaining the July 1 price increase, citing its relatively steady average revenue per user from 2022-23 to 2023-24, implying that a mid-year change should not be excessively disruptive.
“Our preliminary view is that NBN Co’s position is valid, although we acknowledge that the impact of price changes could vary across retailers depending on their product mix,” the ACCC remarked.
Furthermore, it highlighted that foregoing this price increase could jeopardize short-term efficient cost recovery objectives, potentially leading to more substantial price fluctuations or shocks in the future.
