Stephen Rue (NBN Co)
Australia’s five biggest telcos have rallied together against NBN Co’s “insufficient” COVID-19 relief, with Vocus going as far as to accuse the broadband builder of “profiteering” from the recent crisis.
The bosses of Telstra, Optus, TPG Telecom, Aussie Broadband and Vocus have penned a joint open letter to NBN Co CEO Stephen Rue demanding alterations to its $5.2 million relief package in response to the Delta outbreaks and ensuing lockdowns starting in June.
The letter, which was also sent to communications minister Paul Fletcher, called on NBN Co “to meet its social obligation to all Australians and retrospectively” by adjusting its current and much-maligned COVID relief program.
As reported at the time, the RPSs took particular issue with NBN Co’s decision to not reinstate the 40 per cent Connectivity Virtual Circuit (CVC) capacity increase from the previous lockdown of 2020.
Despite the program, NBN Co posted a 21 per cent year-on-year increase in revenue, totalling $4.6 billion for the year ended 30 June 2021, while its loss fell by 27 per cent to $3.8 billion.
However, the Delta relief program, the open letter argued, means “RSPs are paying substantially more in CVC overage charges than what could have been anticipated”.
As such, the RSPs have proposed two changes applied retrospectively from June 2021 that would “fairly share the burden of current COVID-related increases in consumer demand between NBN Co and RSPs”.
The first change proposed would be to update the starting month for the baseline usage to May 2021, a month before the Delta outbreaks across Australia, which led to “unexpected and significant increases in [broadband] usage”.
“Using the current baseline, these increases have not been accommodated and as such RSPs have been exposed to significantly increased CVC overage charges,” the letter stated.
“A change of this baseline to the average from 1 May – 26 May 2021 would align with NBN Co’s most recent changes to the bundle inclusions and will accommodate the significant increase in demand driven by the current lockdowns.”
Alongside this, the five bosses, Telstra’s Andy Penn; Optus’ Kelly Bayer Rosmarin; TPG’s Iñaki Berroeta; Aussie Broadband’s Phil Britt; and Vocus’ Kevin Russell, called on NBN Co to update the calculation methodology to use the individual usage of each RSP.
“Under the current relief program, the credit for an individual RSP is based on the total industry overage for the period," the letter continued. “Being based on industry overage means an individual RSP cannot calculate the credit amount they will receive until it is announced by NBN Co after a given period.”
According to the letter, this gives RSPs no certainty over their input costs to supply the National broadband Network (NBN), preventing them from taking action to offset cost increases for the period.
“A change to this methodology to use individual RSP usage will allow RSPs to calculate their maximum overage exposure and enable efficient management of input costs,” the letter added.
Taken together, these changes would mean any overage charges above the average from 1 May – 26 May 2021 baseline (plus 25 per cent CAGR) for an individual RSP would be rebated by NBN Co, the telcos claimed.
In an additional comment to ARN, Vocus CEO Kevin Russell said: “Simple fact: NBN makes more money today with Australians forced to work from home than they did three months ago before lockdowns. NBN is failing its social responsibility to the Australian public.”
"NBN Co’s net revenue reduction and additional capacity-related network investment has cost the company more than $100 million in support we have provided internet retailers to enable them to provide Australian households more data than ever before during COVID," NBN Co said in a statement.
"NBN Co’s Residential Average Revenue Per User (ARPU) has remained steady and flat for the last 18 months to 30 June 2021 at $45, while capacity-related network investment to support additional data demand has grown.
"We have continued to support internet retailers during the COVID pandemic and have capped additional revenues at pre-COVID growth levels to ensure we are not taking advantage of COVID.
"It is unfair and unrealistic to expect Australian taxpayers to offer additional subsidies beyond what is already in place to support and underpin the profits of retailers."
