NBN Co mulls ditching CVC for fixed pricing

NBN Co has revealed a potential plan to replace its much-maligned connectivity virtual circuit (CVC) pricing with ‘flat’ wholesale prices.

The network provider on Monday released a paper outlining its proposals to replace CVC with Access Virtual Circuit (AVC)-only pricing on some or all of its fixed-line and fixed wireless speed tiers.

The first option involves flat rate AVC-only pricing on all speed tiers, while the second would only remove CVC for wholesale speed tiers of 100 Mbps and above. The last will involve a 25 percent reduction in the CVC overage rate from $8 to $6 per Mbps.

A report from CRN sister site iTnews showed the first proposal would get an immediate $5 to $20 per month price hike for all tiers, plus yearly indexed increases. The second proposal would include a $5 per month increase for 50Mbps while 100Mbps and above will get the $5 to $20 per month increase and yearly indexed increases.

NBN Co said the proposals were in response to industry feedback and for greater cost certainty, simplicity and value.

“We believe the pricing options presented for discussion represent a balanced approach to meeting the objectives set out in this paper,” NBN Co executive general manager for commercial Ken Walliss said.

“The various pricing options include ones designed to reduce retailers’ commercial risk of exposure to higher than expected usage growth; support the continuation of cheaper data capped retail plans and promote a competitive environment that enables retailers to differentiate their respective offerings from their peers.”

“In evaluating a final pricing option, key considerations for NBN Co will be promoting strong outcomes for customers throughout Australia, creating the environment for robust retail competition and opportunities to support all customer groups as much as possible, and maintaining the company’s ability to earn a reasonable return on its investment to enable continued efficient investment in the network,” Walliss added.

“We look forward to progressing these important pricing discussions with industry and the ACCC through the SAU process.”