Major RSPs Slam NBN Co’s CVC Soft Cap Proposal

Some of Australia’s biggest RSPs slammed NBN Co’s proposal to introduce a ‘soft cap’ for CVC. The reason behind this was that the ‘soft cap’ failed to address the underlying concerns of the RSP about NBN Co’s capacity-based pricing.

TPG’s statement

According to TPG Telecom’s group executive legal and external affairs Trent Czinner, “Unfortunately, this proposal doesn’t go far enough.” 

“The CVC is ultimately a tax on speed for consumers. Instead of simplifying the pricing model and moving away from the outdated CVC, it adds more complexity and further entrenches the CVC,” he added.

“We’re concerned the CVC soft cap threshold is designed to discourage competition,” Czinner said. “Working from home, video and other consumer trends mean the CVC isn’t fit-for-purpose and should be replaced with a flat pricing model,” he added.

Optus’ statement

On the other hand, Andrew Sheridan, the vice president for regulatory and public affairs of Optus said that: “These consultations are a waste of time if NBN simply ignores feedback, fails to consider the needs of customers, and continues to maintain the fiction that prices are going down.”

“Almost unanimously, retail service providers called on NBN to provide a fixed price option and advised that its short-term options are not fit-for-purpose for consumers, RSPs – or even the NBN. NBN has ignored us, and ignored the users of the NBN.”

Sheridan further added that NBN Co had “proposed a discount structure that bizarrely still allows customers’ costs to increase, whilst requiring RSPs to limit competition between themselves.”

Telstra and Vocus’ statements

Meanwhile, according to a Telstra spokesperson: “NBN Co’s latest proposal again fails to address the fundamental concerns we and other retailers have about increasing costs and complexity.”

Antony de Jong, Vocus chief executive, accused NBN Co of paying “lip service to RSPs’ feedback.”

According to him, “These changes have been proposed in pursuit of NBN’s commercial interests, not in the interests of Australian consumers or supporting a sustainable market for RSPs to provide competitive services.”

“If NBN wants to have an actual consultation on pricing, it’s time to put up or shut up,” the chief executive added. 

“NBN has continued down the path of incrementalism and is kicking the can down the road on real price reform. RSPs have to wait more than a year to access increased inclusions, and good value entry-level plans are always second fiddle to NBN’s tactical moves to push consumers onto higher speed tiers. Not surprisingly, NBN’s commercial muscle is working hard while their listening-to-customers muscle remains underdeveloped,” he said.