Billionaire Elon Musk has reportedly played a major role in driving up prices on Australia’s NBN telephone and internet network.
Elon Musk has been accused of a price hike planned by the National Broadband Network’s parent company, which claimed the billionaire’s Starlink technology had reduced the company’s viability.
NBN Co this week outlined a series of significant price changes in a proposal to the ACCC as part of its request to review its Special Access Obligation (SAU).
The SAU regulates how much NBN Co may charge retail telephone and internet companies such as Optus, Telstra and TPG Telecom.
In its proposal, which was criticized by the ACCC, NBN Co claimed that prices should be raised because of “increasing competition from 4G, 5G, fixed wireless networks and low-orbit satellite operators in those markets where residential services are provided” .
In addition to proposing significant changes to the product and price undertakings, NBN Co has sought to incorporate fiber-to-the-node and other copper-based technologies into the SAU to create a single regulatory framework encompassing all network technologies.
The company also proposed changes to NBN Co’s cost recovery framework and rules for how the ACCC assesses network spending.
NBN Co said competition in the market, including from Musk’s company, was a major factor in the request for change.
“This competition is stimulating and will continue to drive nbn’s efficient pricing,” the proposal, published earlier this week, reads.
“These complex competitive pressures and differences in end-user demands mean that it is not possible for nbn to determine prices simply by dividing its revenue needs by expected access volumes to determine prices.”
The company argued that NBN should “pursue advanced pricing strategies, taking into account variations in demand and willingness and ability to pay”.
The ACCC closed down NBN Co’s request, arguing that it would create a ripple effect that would double the cost of entry-level Internet subscriptions over the next decade and lead to perpetual price hikes through 2040.
Leading telcos were also quick to condemn the plan in a succinct letter to the ACCC published Wednesday, calling on watchdog chief Gina Cass-Gottlieb to introduce an “access rule” that would force the ACCC would be responsible for the service prices.
“NBN Co wholesale prices will continue to rise each year thereafter at a rate that exceeds inflation, worsening the cost of living for households and making NBN high-speed broadband unaffordable for many Australians,” the letter, signed by Telstra, reads. TPG Telecom, Vocus, Aussie Broadband and Optus, read.
“We believe that the long-term interests of the end users are paramount. Current and future end-users should not be forced to bear NBN Co’s inefficient historical costs and subsidize access to adjacent competitive markets.”
However, NBN Co doubled down on its justification, claiming that its competition “caused a sustained and increasing net churn from the NBN network.
It predicted it would lose 3.1 percent of its customer base in FY 2022 — equivalent to 263,000 customers and 3.3 percent, or 283,000 customers in FY 2023.
In addition, it claimed that its biggest competition was “mostly concentrated in high-value, low-cost areas to serve.”
ACCC Commissioner Anna Brakey said a thorough public consultation will take place before the watchdog makes a decision on whether or not to accept the proposal.
“Before deciding whether to accept NBN Co’s proposed variation, we are conducting a public consultation to hear from the retailers who sell NBN services, other service providers, and households and businesses that rely on NBN for their broadband,” she said. .
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