LNP have cut NBNCo revenue from CVC
Labor's intention was for NBNCo revenue growth to come from CVC data usage income. This was wise, because as streaming moved from HD, to FHD to 4K and beyond users would naturally consume more without a change in behaviour.Users would choose a larger quota and NBNCo would receive additional revenue to upgrade the network.
RSPs wanted to sell unlimited plans and purchased insufficient CVC to meet the requirements. The LNP were smarter than most give them credit for and responded by reducing CVC pricing from $20/Mbps to $8/Mbps and then bundling CVC with AVC, while using the ACCC to crack down on RSPs with congestion.RSPs are reluctant to sell faster speeds because the small number willing to pay for 100Mbps and faster will be more demanding and more likely to monitor the performance of their connections.
The impact of this is that:
- NBNCo cannot drop the connection (AVC) pricing because CVC revenue has been cut
- NBNCo doesn't have the budget to increase network capacity in response to customer demand
- Demand for higher speeds not supported by FTTN is suppressed
Possibly the only solution is for a program similar to Technology Change for wireless, where customers can contribute to the cost.
Biting the hand that feeds IT
