NBN retailers put under watch as price model shifts

NBN retailers are on notice that their responses to changes in wholesale pricing are being watched.

The Australian Competition and Consumer Commission (ACCC) said it had written to retail service providers (RSPs) this week “making clear our expectation that they are upfront and honest with consumers about what the price changes will be and why these changes are happening.”

New pricing was approved last month, with Aussie Broadband first to show how the changes would flow through at a retail level.

But Aussie Broadband’s announcement garnered political attention, with the opposition seizing on lower tier price rises, despite that being on the cards for some time.

The ACCC is also now taking an interest, in part because the retail responses to the new price model are perhaps not what it anticipated.

The issue of pass-through has bubbled through various NBN consultations over the past few years.

It most often arises in discussions about financial compensation NBN Co pays for missed service standards; with the belief that any money NBN Co pays should flow directly to the impacted customer.

The ACCC is taking an interest now in the flow through of price changes from a wholesale to a retail level, in particular any mismatch where a reduction at the wholesale level is not reflected in the retail price.

ACCC commissioner Anna Brakey urged customers to “shop around for their NBN broadband plans” as more providers announced how they would handle the new NBN price model.

“There are significant price differences between retailers so it is worth seeing what other deals are available,” Brakey said.

The other aspect of implementing the new NBN pricing that the ACCC is watching closely is how retailers handle the near convergence of 50Mbps and 100Mbps pricing.

The NBN price model makes it more cost-effective to serve some customers on higher-tier plans, which are charged at a flat rate from a wholesale perspective.

“NBN retailers should not be pushing households towards more expensive offers with speed inclusions that are higher than they need,” Brakey said.

“If we were to see this, it would raise concerns.  

“We expect NBN retailers to provide clear information to consumers about suitable plans for their circumstances and preferences.”

Brakey said the ACCC is closely watching for advertising that attempts to drive NBN users up to higher tier plans they have no use for.

“We are concerned when we see advertising by NBN retailers that suggests households need to be on 50Mbps or even 100Mbps plans to stream multiple shows at once, when a less expensive plan may be sufficient,” she said.

“Of course, some households may have a preference for the higher speed tiers, but we want to make sure that customers have clear and accurate information to guide their decisions.”