Could Peak-Time Internet Charging Be On The Cards For Australian ISP Customers?

Could Peak-Time Internet Charging Be On The Cards For Australian ISP Customers?

The latest ACCC/AER Regulatory Conference has thrown up some interesting arguments about the need for congestion pricing. The proposed changes would see ISP customers charged higher fees during peak usage times. In other words, penny-pinchers would need to limit their data usage to less busy times of the day.

In a keynote address delivered to the 2013 ACCC/AER Regulatory Conference this morning, ACCC Chairman Rod Sims discussed congestion management and the ways new pricing practices could help lessen the burden.

“It has been long argued that customers should pay different tariffs for electricity at different times. In principle, tariffs set in this way should allow for more efficient network and generation utilisation, thus delaying the need for capacity expansion,” Sims explained.

“Australians are consuming more audiovisual content (films, TV, video an online gaming) than ever before, and providers are diversifying the ways in which they deliver the content depending on the type, scale and reach of the services they are providing…This additional content, however, requires capacity, and if this is not met by additional investment, network congestion will result.”

Sims indicated that the industry may need to consider modifying their pricing practices so that consumers are charged based on the quality and time of service they wish to receive, rather than a download cap or data speeds. Sim noted that congestion pricing for infrastructure services was likely to cause consumer caution, however.

“The challenge for us is to understand this caution and see what types of safeguards might need to be put in place…We recognise that congestion pricing is a challenge that regulators have to confront.”

Sim also discussed the challenges of regulating the NBN, which will be one of the ACCC’s chief tasks throughout 2013.

“The NBN [is] a monopoly, with the usual incentives of all monopolies to raise price or offer inadequate service quality,” Sims said. “Also, as the NBN will be a new build, the standard approaches to regulation are not readily applicable. So we have been grappling with the details of how to balance, on the one hand, the interests of consumers in reasonably priced services, and on the other, NBN Co’s legitimate interests in recovering its costs.

“All the while, of course, aiming to maintain incentives for NBN Co to undertake its major construction task in the most efficient way possible within its policy mandate. These are the types of issues that the Commission has been working through with NBN Co so it can further refine and respond to proposed amendments to their Special Access Undertaking (SAU).”

The ACCC/AER conference in Brisbane will hold a breakout session on congestion management for communications tomorrow morning, chaired by one of the ACCC commissioners, Joe Dimasi. We’ll keep you posted with any further developments.