Aussie Broadband formalises request to scrap NBN Co's controversial CVC charge

Aussie Broadband has made a formal request to the federal government to remove NBN Co’s much-maligned Connectivity Virtual Circuit (CVC) charges.

In a submission (pdf) to a parliamentary inquiry into the NBN earlier today, AussieBB managing director Phillip Britt argued the removal of CVC is for the long-term interests of end-users for stability and certainty in both service and price.

AussieBB cited the network provider’s free CVC offer to retail service providers, which had been in place since the onset of the COVID-19 pandemic in response to increased demand from people working and studying from home due to the restrictions.

“The COVID-19 pandemic continues to raise challenges for NBN users (the community and business alike) as they adapt to new ways of working and learning,” the submission read.

“We have observed a continual, increased usage across our broadband customer base; this has been magnified under COVID-19. The projected impact from COVID-19 and its effect on the new normal, including increased volumes of those working and distance learning from home is expected to continue for the foreseeable future.”

Aussie Broadband's own data as presented in the submission

The telco said industry participants like RSPs, NBN Co and regulators should acknowledge this change and take time to recalibrate its impact and measure risk on operations and the long-term interests of end-users.

“The pandemic has demonstrated that reliable and secure broadband service is essential for Australia, our communities and our economy,” the submission continued.

AussieBB said NBN Co’s CVC relief was well-received among RSPs, but insists the charge should be removed altogether in favour of a single access charge.

“If CVC remains, it will become challenging to offer pricing certainty and service stability to customers. With existing small margins, RSPs will need to make commercial decisions that will impact the customer; either increased costs or reduced quality of services.”

“The continued presence of CVC requires RSPs to continually find a problematic balance between customer service with minimal margins and overage expenses; we strongly believe this may result in RSPs opting out of the market. A reduction in competition is undesirable for the long-term interests of the end-user.”