NBN Co hopes to reduce network congestion with new lower supplier costs

If you’re one of the thousands of Australian NBN customers who’ve suffered from slower-than-expected internet speeds, help might finally be on the way.

Back in February, NBN Co announced a new discount scheme for its capacity-based Connectivity Virtual Circuit (CVC) charges, but it’s only today that those reductions actually go into effect.

CVC pricing has to do with how the national broadband service sells wholesale access to retail service providers (RSPs), like your ISP. Historically, these charges have been high: $20 per Mbps per month when the service began, then was brought down to $17.50 in November 2014. Last year, the price fell to $15.25.

Starting today, the discounts will increase based on how many end-users the RSP has connected. In theory, that means ISPs are incentivised to add more overall bandwidth as their customer base grows.

For the end user

NBN Co’s latest weekly update boasted that the broadband service was now available to over 5 million premises, but less than half of those have signed up for the service. NBN Co is hoping this new discount scheme should also help boost those numbers.

The lower supplier cost should especially benefit major resellers like Telstra, Optus and TPG, as they can buy more CVC and provide high-speed internet to more customers, thus reducing the congestion that’s been plaguing some parts of the network, particularly during peak times.