NBN revamps CVC pricing scheme


blog As you may have seen last week, the NBN company announced that it would conduct a trial of revamped pricing on its CVC product — the structure through which the NBN company actually charges retail ISPs for downloads over its network, rather than customer connections. I think the best article on this subject was published on ZDNet. The outlet reported (we recommend you click here for the full article):

“Sarah Palmer, executive general manager for Product and Pricing at NBN, explained that usage on the NBN has grown from 30GB per month to over 100GB per month over the last four years, with the company’s new pricing aiming to reflect and support this.

“What we’ve done is built out a discounting scheme that the retail service provider [RSP] … if you want to offer plans that encourage large usage or utility of the internet, you actually get a discount from the NBN in order to be able to do that, and that’s how we help to facilitate this sort of growing difference between very low and bigger and bigger average usage,” Palmer said.”

Unfortunately, the NBN company saw fit not to brief Delimiter on the topic (we suspect we’re not in its good books at the moment — naughty, naughty). However, the company did provide Delimiter with the following statement as an explanation of the charges:

“NBN is trialling a new wholesale discount pricing model for the next two years on one of the company’s two pricing levers, reflecting the usage patterns of the modern broadband market.

Broadband use for businesses and homes connected to the NBN network is far higher than other connections, by up to 40 gigabytes per month more. People connected to the NBN network love their connection, and are using their service more and more for a range of activities.

The discount model facilitates a range of retail plans that reward greater dimensioning of CVC on average per end user. This is aimed at allowing our customers, the retail providers, to a provide better broadband experience in homes and businesses on the NBN network. The model aims to provide retail service provider confidence by giving price certainty over the next two years.

Importantly, the model is non-discriminatory in that it is calculated on the average dimensioning of CVC per end user and not related to the volume of purchase of CVC. This means the discount is available to all NBN wholesale customers, regardless of size. There is also consideration built into the model for voice only end users, or homes on the network who only want a telephone line.”

Personally I think these changes are very welcome … the CVC pricing scheme has needed a revamp for quite some time. It will be interesting to see the impact of this discount over the next year or so.


  1. This is actually a shockingly fair model no matter how big the ISP is as it focuses on the customers (even the ACCC could learn from this!).

    I must say I’m pleasantly surprised.

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