Parts 7 and 8 of the Telecommunications Act ensure that broadband networks operate in a similar way, and to the benefit of consumers. They require network operators to offer services to any retail providers on request (offer open access on a non-discriminatory basis) and that they must be operated separate to the retail level (wholesale only). The ultimate aim is to ensure competitive networks exist that benefit consumer by increasing choice of retail providers.
Since 2012 Telstra has had an exemption from complying with these requirements in its South Brisbane Velocity network area. Other areas of Telstra’s fibre Velocity area are also exempt. These are scattered across the country, predominantly in areas of medium density population, including retirement villages, and greenfield developments (in Western Sydney, for example). These are areas populated with low income families, and older people on fixed incomes.
ACCAN considers the continuation of exemptions reduces the incentives for Telstra and NBN Co to negotiate to change these arrangements. Although at a commercial level this impasse has been not necessarily been unfavourable for Telstra or NBN Co, consumers in the network footprint are significantly negatively affected. Our study of the services available to consumers in the South Brisbane footprint shows the following:
- Higher prices than similar services on NBN – for Telstra Velocity customers, an additional $15-$20 month which equates to $180-$240 additional price premium over a year. Exetel has similar mark ups; Internode prices are higher – a 30/1 Mbps service with 100GB data was sold at $99.90 per month, $45 more than an equivalent service over NBN priced at $55 per month.
- In the past five years, consumers in the Telstra Velocity footprint have paid an extra $900 to $1200 for services.
- We are concerned at the impact on vulnerable consumers in the area. Our analysis shows there are 1,065 age pensioners; 621 Disability Support pensioners and 746 low income families on Family Tax Benefit A many of whom use Velocity services at significant mark-up;
- Fewer choice of retailers (Internode and iiNet ceased selling new services in 2017).
ACCAN considers arrangements for the future of the Velocity network should not be postponed by any further extension. The current situation is inappropriate and inequitable. NBN Co and Telstra should be required to resolve the matter, so that the detriment to consumers served by the Telstra Velocity network comes to an end.
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