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All rights reserved. © 2022 nbn co limited | ABN 86 136 533 741 Page 2 of 71 Uncontrolled when printed nbn SAU Variation 2022 - Supporting submission © 2022 nbn co limited | ABN 86 136 533 741 Page 3 of 71 Uncontrolled when printed Contents Executive Summary ......................................................................................................................................... 4 1 Introduction ......................................................................................................................................... 11 1.1 nbn’s Variation ....................................................................................................................................... 11 1.2 Structure of this Submission .................................................................................................................. 12 2 Summary of how the Variation addresses ACCC and industry feedback.................................................. 13 2.1 The Variation responds to ACCC and industry feedback ....................................................................... 14 2.2 The Variation achieves the ACCC Outcomes for a revised SAU ............................................................. 21 3 State of competition ............................................................................................................................. 25 3.1 Overview ................................................................................................................................................ 25 3.2 nbn faces significant and increasing competition.................................................................................. 26 3.3 Mobile/fixed wireless competition ........................................................................................................ 28 3.4 Fixed-line competition ........................................................................................................................... 35 3.5 New developments ................................................................................................................................ 38 3.6 Satellite .................................................................................................................................................. 38 3.7 Competition incentivises efficient pricing outcomes ............................................................................. 39 4 Demand for higher speeds will continue to grow ................................................................................... 42 4.1 Overview and context ............................................................................................................................ 42 4.2 What the data and research show about internet bandwidth and speed requirements ..................... 43 4.3 Detailed analysis of likely future end-user speeds ................................................................................ 45 4.4 Ongoing network investment will be required to meet forecast demand ............................................ 52 5 The rationale for investing in fibre ........................................................................................................ 53 5.1 The policy context .................................................................................................................................. 53 5.2 Operational efficiencies ......................................................................................................................... 54 5.3 Cost efficiencies arising from rolling out fibre at scale .......................................................................... 59 5.4 The growing demand for bandwidth and higher speeds ....................................................................... 61 5.5 Factoring in lead times ........................................................................................................................... 61 6 The Variation supports economically efficient outcomes ....................................................................... 63 6.1 The commitments in the Variation promote economic efficiency ........................................................ 64 6.2 Broader regulatory framework supports competition and efficiency ................................................... 67 6.3 Market incentives to set efficient prices ................................................................................................ 68 Abbreviations and acronyms .......................................................................................................................... 69 nbn SAU Variation 2022 - Supporting submission Executive Summary nbn’s Special Access Undertaking (SAU) plays a central role in the telecommunications industry’s regulatory framework. Originally accepted by the ACCC on 13 December 2013, the SAU provides certainty to nbn, retail service providers (RSPs) and end-users by governing key price and non-price terms on which nbn supplies services to RSPs over the period to 30 June 2040. The SAU also provides for regulatory oversight by the ACCC, which will be enhanced as a consequence of this SAU variation lodged with the ACCC (the Variation). nbn lodged an initial proposal to vary the SAU on 29 March 2022 (the March Variation). In response the ACCC and industry identified areas where the proposal did not sufficiently address industry and ACCC concerns – key among these being pricing certainty, revenue controls, service quality and the roles and powers of the ACCC. In parallel, the Minister for Communications supported the withdrawal of the March Variation to provide nbn the opportunity to propose further amendments to the SAU to reflect changes in the policy landscape and operating environment that have occurred since March. While offering significant enhancements to the current SAU, having received industry and ACCC feedback, nbn acknowledges that its proposal in the March Variation did not go far enough to address industry concerns or to achieve the ACCC’s desired outcomes for an SAU variation. nbn believes that the additional changes proposed under this new variation reflect greater alignment with ACCC and industry expectations while at the same time creating a framework for operational efficiency and for nbn to have the opportunity (but not the guarantee) to earn minimum revenues necessary to sustain and finance its business. In particular, nbn believes that the Variation establishes a regulatory framework that delivers on the consensus formed by the industry working group that moving to a standard utility model of regulation “would assist in maximising the economic and social benefits of the significant public investment in the NBNâ€. In particular, nbn has been guided by the five key outcomes identified by the ACCC from these working groups, namely that:1 • nbn has the opportunity to earn the minimum revenues it needs to meet its legitimate financing objectives, including to transition to a standalone investment-grade credit rating; • nbn end-users are protected from price shocks and from prices that are higher than necessary in later years; • the regulatory framework provides incentives for nbn to operate efficiently and promote use of the nbn® network; • nbn access seekers have greater certainty over the costs that they will face when using the nbn® network; and • there is a clear and robust quality of service framework so that access seekers and end-users know what to expect from nbn services, including a review mechanism so that service standards remain fit for purpose, (the ACCC Outcomes). Ultimately the ACCC must be satisfied that the Variation meets the statutory criteria set out in section 152CBD(2) of the Competition and Consumer Act 2010 (Cth) (CCA) before it can accept the Variation. nbn submits that as well as being consistent with the ACCC Outcomes, the Variation satisfies the statutory criteria – and should therefore be accepted by the ACCC. 1ACCC, NBN Co Special Access Undertaking: Summary of industry working group outcomes, December 2021, p. 1: https://www.accc.gov.au/system/files/ACCC%20-%20Summary%20of%20industry%20working%20groups%20report_0.pdf. © 2022 nbn co limited | ABN 86 136 533 741 Page 4 of 71 Uncontrolled when printed nbn SAU Variation 2022 - Supporting submission At a high level, the key proposed changes in the Variation which are in addition to those in the March Variation, relate to six areas of nbn’s operations: 1. Pricing. The March Variation put forward far-reaching reforms to the prices of nbn’s core services. These included the introduction of AVC-only prices for wholesale services 100 Megabits per second (Mbps) and above, transitioning from discounted bundles of AVC and CVC to new offers with maximum regulated pricing, a shift to charging for any CVC overage on the basis of CVC capacity actually utilised rather than provisioned2, and providing RSPs with automatic twice-yearly adjustments to CVC inclusions on TC-4 Bundle Offers to reflect changes in end-user demand. The proposed changes to nbn’s pricing in the Variation further reduce the maximum prices that nbn may charge and increase price and cost certainty for RSPs. This will be achieved (among other things) as follows: a. nbn will transition TC-4 Bundle Offers to $0 CVC pricing across all wholesale speed tiers (i.e., $0 per Mbps CVC TC-4 Overage Charge) by no later than 1 July 2026. This will be enabled through a progressive rebalancing of CVC and AVC charges; b. relative to the prices proposed in the March Variation, nbn will reduce AVC-only charges on the Home Fast (100/20 Mbps), 100/40 Mbps, Home Superfast (250/25 Mbps) and Home Ultrafast (up to ~1000/50 Mbps) speed tiers upon implementation of the varied SAU; c. relative to the prices proposed in the March Variation, nbn will reduce effective charges through amended pricing or increased inclusions on TC-4 Bundle Offers for the 12, 25 and 50 Mbps speed tiers; d. nbn has reduced the ongoing charges for the ports typically used by smaller RSPs to interconnect to nbn’s network (network-to-network interface, NNI), which came into effect on 1 November 2022, and this change is reflected in the pricing included in this Variation; and e. additional price controls and price certainty commitments, including: i. ii. iii. individual sub-caps for certain services (in addition to the new Weighted Average Price Control (WAPC) framework discussed below); introduction of pricing principles into the SAU to provide clarity over the matters to which nbn must have regard in setting new Prices; publication of a Statement of Pricing Intent for each Regulatory Cycle, which will provide guardrails that govern how nbn can change or set new prices within that Regulatory Cycle; and iv. publication of an annually updated three-year pricing roadmap of which: year one is committed prices in the short term via an annual SAU Tariff List; year two commits to maintaining price relativities; and year three is indicative pricing. These changes respond directly to concerns identified by RSPs about ongoing price certainty, as well as concerns about the variability and operational complexity associated with CVC charges on nbn TC-4 services. This pricing proposal enables more end-users to access the full capability of the network, and promotes competition by reducing barriers to entry and expansion for smaller RSPs on nbn’s network. 2Utilised charging applies to TC-4 CVC on fixed-line and Fixed Wireless networks only. © 2022 nbn co limited | ABN 86 136 533 741 Page 5 of 71 Uncontrolled when printed nbn SAU Variation 2022 - Supporting submission Further, these enhancements demonstrate nbn’s genuine commitment to addressing feedback from the ACCC and industry on the March Variation, including as set out in the ACCC Consultation Paper.3 nbn notes that some RSPs have proposed alternative pricing constructs, which nbn has considered. However, these proposals do not appropriately balance the various factors which make up the ACCC Outcomes (e.g., nbn’s ability to earn minimum revenues needed to meet its legitimate financing objectives).4 Accordingly, nbn considers that the pricing proposals set out in the Variation and summarised above better achieve the ACCC Outcomes while also addressing the key concerns raised by the ACCC and industry since the March Variation. 2. A weighted average price control as the primary form of economic control. nbn will introduce a WAPC or ‘basket’ price control applicable to all nbn services with limited exceptions (e.g., for ‘Competitive Services’), with associated sub-caps. This will replace the individual price controls and the long-term revenue control framework in the current SAU. The proposed WAPC will allow for a transition to ‘cost reflective’ prices over time with annual average price increases across all products (on a ‘use it or lose it’ basis) to be capped at CPI during an initial glidepath period (i.e., before nbn is expected to first achieve its Core Services Annual Building Block Revenue Requirement (ABBRR), currently expected to be between FY30-32). From the financial year after nbn is expected to first achieve its Forecast Core Services ABBRR, overall price increases will be capped at a percentage which allows nbn’s forecast annual revenue from WAPC services to equal the ‘WAPC Revenue Requirement’. In turn, the WAPC Revenue Requirement is based on nbn’s Core Services ABBRR for each financial year, plus a portion of nbn’s Initial Cost Recovery Account (ICRA) determined by reference to a number of principles, including the long-term interests of end-users (LTIE). This will allow nbn the opportunity, but not the guarantee, to achieve a return on and of its Regulatory Asset Base (RAB) as well as recovery of the retained portion of its ICRA over the remaining SAU period. The introduction of a WAPC will address RSP concerns about pricing certainty, transparency and demand risks in respect of nbn wholesale prices. A WAPC creates a stronger link between nbn’s efficient costs and its overall price levels. It also provides an appropriate level of flexibility for price-setting in the future and in response to changing economic conditions and infrastructure competition, while also ensuring that nbn faces strong incentives to maximise the take-up and use of the nbn® network. These were material concerns for the industry, which nbn believes it has now addressed by proposing to introduce a WAPC. The proposed WAPC will be based on nbn’s prudent and efficiently incurred costs, and is expected to provide nbn with the opportunity to earn the revenues it requires over the term of the SAU to meet its investment and financing objectives. This will allow nbn to pay down debt so as to achieve and maintain a standalone investment grade credit rating, continue to invest in the network to lift the digital capability of Australia while remaining competitive in a dynamic market environment, and to operate on a commercial basis, which includes the ability to generate a reasonable return on equity. 3. Service Standards. The Variation will incorporate a set of benchmark service standards into the SAU (Benchmark Service Standards), and nbn will commit to include in its Standard Form of Access Agreement (SFAA) service standards that are no less favourable to RSPs than the Benchmark Service Standards. This will include service levels, performance objectives, rebates and corrective action. 3ACCC, Proposed variation to the NBN Co Special Access Undertaking, Consultation paper, May 2022. 4Department of Finance, Commonwealth Government Business Enterprises – Governance and Oversight Guidelines, January 2018, pp. 26-27: https://www.finance.gov.au/sites/default/files/2019-10/commonwealth-gbe-governance-and-oversight-guidelines-rmg126.pdf. © 2022 nbn co limited | ABN 86 136 533 741 Page 6 of 71 Uncontrolled when printed nbn SAU Variation 2022 - Supporting submission The Variation includes a mechanism whereby nbn proposes service standards and rebates for each Regulatory Cycle (i.e., three to five years) as part of each Replacement Module Application. The SAU gives the ACCC the power to set benchmark service standards and rebates as part of an ACCC Replacement Module Determination, which may be the same as or different to those proposed by nbn in its RMA. The Benchmark Service Standards that nbn is proposing for the First Regulatory Cycle, commencing 1 July 2023 (i.e., the start of Module 4), will be based on the key nbn® Ethernet service levels and performance objectives under the current Wholesale Broadband Agreement (WBA4), which have recently been supplemented with a targeted set of improvements – specifically the lowering of the dropout threshold for faults, enhanced service levels for CVC and access component modifications, and improved service levels and performance objectives for completion advices. Under the Variation, in addition to the ability to set new/alternative Benchmark Service Standards for each Regulatory Cycle, nbn also proposes that the ACCC may set additional or alternative service standards during a Regulatory Cycle where: (i) a change to nbn’s service standards is required for RSPs to comply with new retail service standards regulations, or (ii) the ACCC has identified a systemic issue with nbn’s existing service standards that results in a material adverse impact on RSPs and where changes to nbn’s service standards are required to address the issue (subject to cost pass-through arrangements). The proposed approach to service standards under the Variation will provide RSPs and nbn with certainty regarding the applicable Benchmark Service Standards that apply for each Regulatory Cycle. Embedding these service levels and performance objectives in the SAU provides meaningful price/quality link that is subject to regular review, which directly addresses key concerns raised by the ACCC and industry. Further, nbn notes that embedding Benchmark Service Standards in the SAU does not preclude nbn from agreeing to improved service standards over time with industry. This is appropriate given that nbn is continually investing in its network and making operational improvements. This flexibility to commercially agree improved service standards, along with the proposed powers for the ACCC to set additional or alternate service standards over time, should provide RSPs and end-users with confidence that the service level commitments set out in the SAU will continue to reflect industry and consumer expectations of performance on the nbn® network. 4. ACCC roles and reserve powers. The Variation will significantly expand ACCC powers under the SAU, including the power to reset nbn’s revenue and pricing regulation framework from 2032. The significant expansion of the ACCC’s role from 2032 should provide long-term confidence to RSPs and endusers that the price and non-price regulation to which nbn will be subject remains fit for purpose. The Variation achieves this by reducing the term of Module 2 of the SAU from 2040 to 2032 and introducing a new ‘Module 3’. This Module 3 introduces a significant change to the regulatory framework governing access to the nbn® network by implementing a principles-based approach using the propose-respond model. This gives the ACCC a substantive role, and will allow it to address any concerns that may arise in the future about the outcomes the SAU arrangements deliver for RSPs and end-users. Given that a key purpose of the SAU is to provide nbn with long-term regulatory certainty, this is a key concession that nbn has made to address the concerns of stakeholders about the ongoing operation of the SAU for up to 17 years from the time the Variation is likely to be accepted. Relative to the March variation, other new functions and powers for the ACCC under the Variation include: © 2022 nbn co limited | ABN 86 136 533 741 Page 7 of 71 Uncontrolled when printed nbn SAU Variation 2022 - Supporting submission a. the power to undertake a review of the Weighted Average Cost of Capital (WACC) methodology every Regulatory Cycle; b. the power to set additional and alternate service standards in certain circumstances; c. the power to approve nbn’s Cost Allocation Manual and accounting separation protocols; d. new review powers in the event that nbn’s prices are inconsistent with its Statement of Pricing Intent or where specified TC-4 discount thresholds are met; e. a power to make a determination under the SAU as to whether nbn has complied with the WAPC, pricing sub-caps and TC-4 Relativity Restriction (in addition to the ACCC’s existing powers to enforce the SAU); and f. additional powers to request (and be provided with) information that the ACCC considers reasonably necessary for the exercise of its powers and functions under the SAU, or to administer and assess nbn’s compliance with the SAU. These proposed additional functions and powers mean that the ACCC will have greater ability to address issues that are unforeseen and to address any concerns that may arise in the future about the SAU arrangements delivering outcomes consistent with the LTIE. Importantly, in certain circumstances, including where nbn’s prices are inconsistent with its Statement of Pricing Intent, or where specified TC-4 discount thresholds are met, the ACCC will have the power to step in. These are significant changes to the SAU which provide the ACCC with much greater scope to intervene and effect changes to nbn’s price and non-price terms and the regulatory framework to which nbn is subject. If the Government relinquishes control over nbn before the SAU expiry date (2040), the Variation contains a mechanism to bring forward the SAU expiry date (noting that the Government has stated5 that it will retain nbn in public ownership for the foreseeable future). This proposal responds directly to ACCC and industry feedback by facilitating the establishment of new regulatory arrangements in the event of a transfer of ownership from the Commonwealth. The ACCC raised a concern about the potential operation of the Replacement Module Application (RMA) and Replacement Module Determination (RMD) processes in the SAU. To address this concern, the Variation puts forward a new mechanism that will see these processes operating under the terms specified in the SAU itself, in place of the current requirement for nbn to submit variations to the SAU to make Replacement Module Applications. Under this new process, before submitting an RMA to the ACCC in respect of a given Regulatory Cycle, the Variation requires nbn to consult with access seekers and consumer advocacy groups on the relevant expenditure which nbn proposes to undertake in that Regulatory Cycle. 5. Recovery of unrecovered losses. While the March Variation had already proposed a significant reduction in the quantum of past losses nbn would be able to recover, and specified a recovery profile that would constrain nbn’s revenues in a way the current SAU would not, the Variation further reduces the level of those past losses which nbn is able to recover. This is in line with the latest guidance from nbn’s Shareholder Ministers that nbn should reconsider its approach to the recovery of nbn’s historical losses, as captured in the concept of the ICRA, to facilitate a focus on a forward-looking regulatory model for the business.6 5Minister for Finance and Minister for Communications, Letter to nbn co from its Shareholder Ministers, 27 July 2022. 6Minister for Finance and Minister for Communications, Letter to nbn co from its Shareholder Ministers, 27 July 2022. © 2022 nbn co limited | ABN 86 136 533 741 Page 8 of 71 Uncontrolled when printed nbn SAU Variation 2022 - Supporting submission As a result, under the Variation, the SAU will: a. cap the total amount of the ICRA that nbn will be allowed to recover over the SAU period. This represents a significant reduction in the ICRA amount from approximately $44 billion (as estimated at the end of the 2022-23 financial year) down to $12.5 billion. Any future losses will no longer be added to the ICRA, and the ICRA will only be indexed to inflation over the period to 2040. b. The $12.5 billion ICRA amount will be allocated as follows: i. a Module 2 amount ($1.1 billion) which may be recovered in the Module 2 period, subject to nbn achieving (or being expected to achieve) its Core Services ABBRR for the first time; and ii. a Module 3 amount ($11.4 billion) which may be recovered over the Module 3 period having regard to a number of principles, including that any RMA and RMD provide nbn the opportunity (but not the guarantee) to achieve and maintain a standalone investment-grade credit rating with a stable outlook, and that nbn has a reasonable opportunity to recover the full amount of the Module 3 ICRA. By capping the total amount of ICRA that nbn has the opportunity to recover over the period to 2040, in accordance with principles set out in the SAU, the Variation will ensure that the recovery of the ICRA will be predictable, constrained, transparent and subject to ACCC oversight. Together with the post-2032 ACCC powers, this will address RSPs’ calls for greater certainty regarding the extent and timing of nbn's recovery of its historical losses and any corresponding uncertainty on future pricing, while providing nbn with a meaningful opportunity to achieve and maintain a standalone investment-grade credit rating with a stable outlook, consistent with Government policy and the Commonwealth’s GBE Guidelines7. As with the current SAU, the Variation contains no guarantee that nbn will be able to recover this reduced ICRA amount, but only provides nbn with the opportunity to do so once it first achieves its Core Services ABBRR. For clarity, this is a once-off adjustment to the ICRA. The proposed arrangements do not allow nbn or the ACCC the opportunity to seek any further adjustment of the capped ICRA at any time. The exception to this is that the Module 2 ICRA amount will be adjusted to $0 on the 30 June 2032 and that the Module 3 ICRA amount will adjusted to $0 on the expiry of the SAU. These adjustments will be made so as to provide industry with additional comfort that the ICRA will not be recovered post-FY40. 6. Prudency and efficiency of nbn’s expenditure. nbn also proposes to make a number of changes to the framework for assessing its prudent and efficient costs. In most cases, these proposed changes respond directly to ACCC concerns regarding the proposed framework for assessing the prudency and efficiency of nbn’s costs in the March Variation. The most significant change is to the Expenditure Objective regarding meeting Regulatory Requirements, so that it does not include compliance with Government policy or other Government directions issued to nbn. As a result of this change, nbn will only be allowed to recover its prudent and efficient costs of complying with Government policy if doing so meets one of the other Expenditure Objectives (e.g., meeting demand, maintaining service quality) or if the Government has issued a formal notice to nbn in respect of a particular project. This change will promote greater transparency regarding the costs of Government policy and the extent to which Government policy impacts consumer prices. 7Department of Finance, Commonwealth Government Business Enterprises – Governance and Oversight Guidelines (Resource Management Guide No. 126), January 2018: https://www.finance.gov.au/sites/default/files/2019-12/commonwealth-gbe-governance-and-oversight-guidelines-rmg126.pdf. © 2022 nbn co limited | ABN 86 136 533 741 Page 9 of 71 Uncontrolled when printed nbn SAU Variation 2022 - Supporting submission While the Government has stated that it will retain nbn in public ownership for the foreseeable future, nbn’s mandate to operate on a standalone commercial basis as a GBE has not changed. It remains imperative that the commitments nbn makes in the SAU (and the WBA) continue to support a commercially sustainable nbn, and provide nbn with the opportunity to continue to efficiently invest in the network, consistent with Government policy and the expectations of RSPs and end-users, and to achieve and maintain a standalone investment-grade credit rating as per the GBE Guidelines.8 nbn considers its planned increased deployment of fibre to be an efficient investment in its network in line with Government policy. Continued transition to digital downloads and increased dependence on home broadband, including for work, education and leisure activities, will continue to drive household demand for higher upload and download speeds, as well as increased bandwidth. Strategically upgrading to fibre is the best way to efficiently ensure that the nbn® network is able to satisfy future demand for higher speeds and increased bandwidth, while reducing operating costs, enabling nbn to offer an improved service over time and ensuring that nbn is well-placed to vigorously compete with current and emerging alternative broadband technologies. This will benefit both RSPs and end-users in the long term. The Commonwealth recently demonstrated its support of increased fibre in the nbn® network by announcing $2.4 billion of investment to upgrade the network that will provide an additional 1.5 million premises the opportunity to access broadband delivered over FTTP technology.9 nbn considers that the changes it is now proposing in the Variation, which are in addition to the significant changes that were proposed in the March Variation, substantially address RSPs’ concerns – as well as satisfying the ACCC Outcomes and the statutory criteria set out in section 152CBD(2) of the CCA. These changes do not come without cost. The pricing changes that nbn proposes to include in the Variation materially reduce nbn’s revenues in the short-term, materially reduce nbn’s ability to recover its costs by monetising the increased usage of the network that will inevitably take place over coming decades and significantly reduce the current level of regulatory certainty delivered to nbn by the SAU. That said, these adverse impacts for nbn are balanced by the considerable benefits that the Variation offers to RSPs and consumers, in particular greater price certainty, the establishment of Benchmark Service Standards, greater transparency and operational reporting, as well as increased roles and powers for the ACCC over the duration of the SAU. Finally, nbn notes that its proposed commitments are put forward as a single comprehensive Variation proposal. The Variation represents an integrated package of proposals, which nbn considers meets the relevant statutory criteria by which such an SAU variation must be assessed, including (as relevant) that the terms of an SAU variation be reasonable and promote the long-term interests of end-users. Ultimately, the Variation submitted by nbn must balance the needs and concerns of all parties and enable nbn to remain a sustainable commercial enterprise that can continue to efficiently implement Government policy. nbn submits that the Variation should be accepted by the ACCC. 8Department of Finance, Commonwealth Government Business Enterprises – Governance and Oversight Guidelines (Resource Management Guide No. 126), January 2018: https://www.finance.gov.au/sites/default/files/2019-12/commonwealth-gbe-governance-and-oversight-guidelines-rmg126.pdf. 9nbn, NBN Co welcomes 2.4 billion Government investment to enable 1.5 million more homes and businesses to upgrade to full fibre nbn, 20 October 2022: https://www.nbnco.com.au/corporate-information/media-centre/media-statements/nbn-co-welcomes-24billion-government-investment-to-enable15million-more-homes-and-businesses-to-upgrade-to-full-fibre-nbn. © 2022 nbn co limited | ABN 86 136 533 741 Page 10 of 71 Uncontrolled when printed nbn SAU Variation 2022 - Supporting submission 1 Introduction
Stage Measure Description May 2017 Dec 2017 Jan 2018 Feb 2018 Mar 2018 April 2018 May 2018 Progress Homes and businesses ready-to-connect The number of homes and businesses that can connect to a plan over the nbn™ access network by ordering via a phone and internet provider. 5,000,000 6,100,000 6,200,000 6,300,000 6,500,000 6,600,000 6,700,000 Homes and businesses connected The number of homes and businesses connected to a plan over the nbn™ access network through a phone and internet provider. 2,300,000 3,400,000 3,500,000 3,600,000 3,700,000 3,800,000 3,900,000 Connect Right first time installations The percentage of homes and businesses that have their nbn™ equipment installed without additional work from NBN Co the first time the installation is attempted. 86% 86% 86% 89% 87% 91% 91% Meeting agreed installation times The percentage of homes and businesses that NBN Co connects to the nbn™ access network within timeframes agreed with phone and internet providers. 88% 94% 93% 92% 92% 93% 94% Use Average network bandwidth congestion The average number of minutes of bandwidth congestion per week per service calculated across all phone and internet providers across the whole network excluding nbn™ Sky Muster™ services. 342 (5 hours 42 minutes) 90 (1 hour 30 minutes) 14 minutes 12 minutes 18 minutes 18 minutes 18 minutes Fixed Line network congestion The estimated monthly average percentage of homes and businesses who experience nbn™ access network congestion. 0.121% 0.097% 0.142% 0.119% 0.068% 0.073% 0.089% Uptake to higher wholesale plans The percentage of homes and businesses on a 50Mbps (download) wholesale speed plan or higher; and 25Mbps (download) wholesale speed plan or lower, purchased from a phone or internet provider. 16% 16% 18% 25% 37% 42% 44% 84% 84% 82% 75% 63% 58% 56% Network availability Percentage of time the nbn™ access network is available and operating. This is calculated per NBN Co’s agreed service levels with phone and internet providers. This excludes planned network outages. 99.9% 99.9% 99.9% 99.9% 99.9% 100.0% 100.0% Fix Meeting agreed fault restoration times The percentage of faults that NBN Co resolves within the timeframes agreed with phone and internet providers. 59% 82% 79% 85% 83% 87% 90% Faults per 100 connected homes and businesses The number of faults on the nbn™ access network per 100 homes or businesses per month. 1.0 1.1 1.1 1.0 1.0 0.9 1.0 Monthly Progress Report May 2018 It is important that this Progress Report is read in conjunction with the information on nbn’s website at nbn.com.au/updates