Aussie Broadband supports Minister Rowland’s rejection of NBN Co’s proposed SAU changes

Aussie Broadband (ASX: ABB) today is pleased that Communications Minister Michelle Rowland has defended Australians from rising internet bills by rejecting NBN Co’s proposed variations to the Special Access Undertaking (SAU).

If implemented, NBN Co’s monopolistic wholesaler pricing would have increased the access charge for any 100Mbps or higher plan by the rate of the consumer price index (CPI) with an additional 3% on top for the first two years. The Australian Competition and Consumer Commission also found the “cost to retailers” for 50Mbps fixed line broadband connections would have been “expected to equal” 100Mbps plan offerings “within only a few years”.

“Minister Rowland is right when she says NBN Co’s proposals had unrealistic revenue expectations,” Aussie Broadband Managing Director Phillip Britt said. “As modern infrastructure that is owned by everyday Australians, NBN Co should be focusing on committing to future network investment and better reseller incentives, not paying down debt.”

Continued investment in a better, faster and more reliable NBN is essential to Australia’s success as a future digital economy. “With the permanent shift towards working from home and the growth in the number of computers, consoles and devices we own, Australians are using the internet more than ever,” Phil said.

“The current pricing is already forcing resellers to absorb lower margins because of the excess usage charges (CVC), and NBN Co should commit to a firm 1 to 3 year timeline to phase CVC out.”

Phasing out CVC in favour of an AVC-only pricing model would encourage a greater adoption of higher speed broadband, which Australian homes and businesses alike will increasingly need with future generations of computers, smartphones, game consoles, VR/AR headsets, smart homes, and other IoT-enabled devices.

“We’ve already seen that Australians will naturally upgrade to faster internet plans when the technology is available at the right price,” he said. “As more Australians get access to plans offering speeds of 250Mbps and greater, better reseller incentives and pricing controls won’t just make those plans more attractive – they’ll provide better long-term outcomes for NBN Co as well.”

Aussie Broadband welcomes the Minister’s call for a revised SAU that provides more certainty for retailers. It also notes that the main constituent concerns to the Minister’s office about internet quality and service can only be guaranteed through consistent investment in the NBN’s ongoing infrastructure – something that should be a cornerstone of the NBN Co’s SAU.

“We understand and appreciate NBN Co’s need to deliver a return on its initial investment,” Phil said. “But with the removal of NBN Co’s debt requirements, this would allow the network to focus on quality and service, the two things that matter most to end users.”

Aussie Broadband welcomes the Minister and the competition regulator having a greater say over the national broadband network’s SAU to ensure a fairer balance between NBN Co’s commercial obligations, ongoing network investment, and positive outcomes for Australian users and businesses.

If NBN Co wants to ensure that the “customer experience is at the core of delivering quality outcomes”, it should welcome the ACCC’s oversight and control of pricing to ensure that Australians can continue to enjoy the quality and speed they expect from their NBN.

“We look forward to engaging again with NBN Co, the ACCC and industry to creating a fairer SAU for all,” Phil said.