In July, NBN chief executive Bill Morrow announced a pricing review in an interview with the Financial Review, conceding the company had an image problem over its high prices and slow internet speeds.

Earlier this week, Mr Sims warned he would not make a decision on updating the NBN's special access undertaking, a key part of the way the ACCC regulates pricing, until NBN's pricing consultation progressed further. The update needs to be made to accommodate new technologies as part of the rollout of the Coalition's model for the NBN.

"We certainly thought their shareholder [the federal government] was interested in there being genuine negotiations. We're still expecting genuine discussions, genuine consultation. Our definition of consultation is not one-way. Consultation means you listen, respond and react," Mr Sims said.

For some time, many players have viewed the costs to access the NBN as too expensive, which is leading to retail service providers not purchasing large amounts of capacity, resulting in congestion and consumer frustration in peak usage periods.

ACCC chairman Rod Sims is hoping NBN and RSPs can work out a solution to pricing. Louie Douvis

The CVC charge has been a long-running and well-documented issue for the telco industry – the newest iteration was rolled out on June 1, with the level of discount based on individual retail service providers' average purchased capacity each month, rather than the previous version, which was a based on a total industry average. The charge is part of the price the NBN sells access to the network to RSPs.

Complaints are increasing as the NBN rolls out to metropolitan areas and RSPs refuse to buy more capacity because it sharply cuts their margins compared to DSL connections. The frustration is only amplified by RSPs advertising top speeds that are not being achieved in peak times, and in some cases is worse than pre-NBN speeds.

In August, the ACCC gave RSPs three months to clean up their "terrible" NBN advertising. The consumer watchdog will also begin publishing speeds achieved, versus advertised speeds, on plans from RSPs in an attempt to create better engagement and education of the customer.


The costs of the NBN threaten the profitability of the telecommunications sector, but it's a problem that stems from the government's original business plan, both in the Labor and Coalition iterations of the project, not the technology that is being used to deliver internet, which requires the NBN to make a certain rate of return on the $50 billion infrastructure project.

NBN chief executive Bill Morrow announced a pricing review in July. David Rowe

Industry experts believe if the government wrote off a significant chunk of the NBN, its investment is $29.5 billion, and didn't require it to deliver the returns it does now, NBN could slash the CVC charge.

However, despite growing pressure to remove the commercial return requirements, the government has repeatedly ruled out bringing the NBN back onto the budget.

This puts NBN between a rock and a hard place. On one side, the government is forcing it to achieve a rate of return, a third of which it is trying to recoup via CVC charges, but on the other side RSPs aren't budging on how much capacity they will buy because they want to entice customers with cheaper plans.

Many players have viewed the costs to access the NBN as too expensive.