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NBN Co makes it official - backhaul charges will fall
CVC down by 12.5 per cent as of February 2015
NBN Co has followed through on its promise to cut the price of its services with a 12.5 per cent snip off the price of its connectivity virtual circuit (CVC) as of 1 February 2015.
Currently $20 per Mbps per month, the CVC will fall to $17.50 per Mbps per month under the new agreement, published in template form by the network builder here.
The CVC is a major chunk of the costs that retail service providers (RSPs) have to fork out to NBN Co for connecting customers. RSPs pay for two kinds of services: the access service (the user interface and the Access Virtual Circuit, AVC, that delivers the customer's “tail” traffic) and connectivity service (the CVC and the interface from NBN Co to the RSP).
RSPs provision their CVCs according to their expectations of customer traffic and the amount of contention they believe their networks and customers can stand – so CVC pricing has long been a contentious issue.
Individuals such as Simon Hackett, once of ISP Internode and now a board member of NBN Co, had said the price structure made it hard for smaller providers to offer services on a national basis.
NBN Co first flagged the price reduction in June. ®
Biting the hand that feeds IT
