The Australian Competition and Consumer Commission (ACCC) has knocked by the National Broadband Network Co’s Special Access Undertaking (SAU) proposal, saying it fails to meet specific criteria for acceptance, with the Commission proposing that it should hold greater say in the regulatory rulings of the NBN.

ACCC Chairman, Rod Sims, proposed a range of changes to the SAU, which the NBN Co would propose to run until 2040.

“Having given this matter detailed consideration, and after considerable consultation with relevant parties, the ACCC is providing its views on the SAU submitted by NBN Co. We are today proposing a number of changes, and consulting on the precise form of those changes,” Mr Sims said.

The SAU is a complex undertaking that NBN Co proposes will operate until 2040. It is therefore important that the rights or obligations the SAU imposes on NBN Co, access seekers and the ACCC are reasonable, in the long-term interests of end-users and clearly expressed so that they are well understood by all parties.”

The ACCC is proposing to issue a notice to NBN Co suggesting variations to the SAU. The ACCC has released a consultation paper about the changes that it is proposing. The key amendments proposed are:

  • Specific drafting amendments to provide certainty about how NBN Co will comply with its obligations under the telecommunications access regime; specifically any ACCC regulatory rulings;
  • Allowing for periodic price re-balancing through review by the ACCC – the outcomes of these reviews would be constrained on the basis that any changes to price structures or relative prices must be revenue neutral in their effect;
  • Amendments to clarify that the ACCC could have a role in overseeing the withdrawal of products and the introduction of new products and their prices, should the need arise, mainly to support an effective price cap regime;
  • Amendments which allow a greater degree of flexibility in the approach that will be adopted at various points in time throughout the SAU, to mirror usual regulatory practice and so encourage efficient investment in and operation of the network; and
  • The removal of a number of proposed non-price terms from the SAU, including those relating to service levels, in order to facilitate effective commercial negotiation.

 

“An SAU varied in line with the ACCC’s proposals would provide considerable certainty to NBN Co that it will be able to recover the prudent costs of its investment, subject, of course, to demand for its services meeting expectations. NBN Co’s assets would not be subject to re-valuation once the NBN is built, and any changes to price structures would be revenue neutral,” Mr Sims said.

 

The NBN Co has welcomed the ACCC’s proposals, saying that complying with the changes would allow for greater certainty in the industry.

NBN Co Head of Regulatory Affairs and Industry Analysis, Caroline Lovell said:  "We appreciate that the ACCC has a challenging task in balancing the views of a range of stakeholders in order to achieve a framework that is in the long-term interests of end users. We will continue to engage with industry and the ACCC as the remaining issues are resolved to ensure that an appropriate balance is achieved.

"Importantly, the draft decision indicates the ACCC is minded to accept fundamental elements of the Special Access Undertaking," Ms Lovell said.