NBN's lowest speed tier is set to get more congested and expensive

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It’s no secret that NBN Co would like consumers to sign up to the higher speed tiers on offer, having designed multiple initiatives to encourage the uptake of NBN50 or higher, but its next move will instead actively discourage people from choosing the lowest tier.

As reported by ITNews, NBN Co is looking to discontinue a ‘discount’ it had in place with Retail Service Providers (RSPs) which effectively made NBN12 (12Mbps) speeds affordable to consumers.

This means that, as early as May this year, we could see congestion on the lowest NBN speed tier network, as well as costs of the NBN12 plans rise once again, after they had been brought down to a reasonable amount with the initial discount introduced in mid-2016.

The discount worked by reducing the charge for Connectivity Virtual Circuit (CVC) bandwidth, which allowed RSPs to redirect excess traffic from its NBN connections to its own network, but with that gone it’s a less viable option overall.

With roughly 25% of all NBN users having opted for the NBN12 speed (close to 1.2 million according to the ACCC), this will likely result in increased congestion as the telcos or RSPs they sign up for won’t purchase as much bandwidth for them to use. 

The alternative option is for these plans to increase in cost, although this would bring them into the same price bracket of a typical NBN25 connection and be a much less attractive option. Of course, for Australians that have chosen NBN12 to start with, the likely reason for this is an inability to afford a faster plan.