The ACCC has decided to reject the NBN Co’s proposed variation to its Special Access Undertaking, stating it doesn’t promote the long-term interests of consumers, and poses risks to efficiency and competition.
The SAU sets the rules for broadband providers to access the NBN over the coming decades, which can include minimum service standards and wholesale price controls.
The ACCC can only accept or reject NBN Co’s variation proposal, but has outlined the areas of concern, as well as the proposes it feels are on the money.
“In making our decision, we have identified a number of aspects of it that reflect issues raised in the ongoing industry consultation process and which represent a significant improvement on the current SAU and earlier variation proposals,” ACCC Commissioner Anna Brakey said.
“We have also outlined some specific issues NBN Co could address to accelerate the pathway to an acceptable variation.”
The finding reads in part: “Today’s draft decision explains why the ACCC is not at this time satisfied that the November proposed variation would result in access terms that promote the long-term interests of consumers over the duration of the variation, due to limitations in the processes under which those terms of access are periodically reset.
“Further, the ACCC considers the proposal would require revenue allowances from 1 July 2032 that would not create incentives for a regulated entity to act efficiently.
“The ACCC also considers that NBN Co’s proposed access terms for the first three years following acceptance of the variation would pose risks to efficiency and competition. This is because the cost of services supplied using the standard wholesale offer would fall over a very wide range, and the variation would not commit NBN Co to providing suitable measures to assist retailers with this residual cost uncertainty.
“A commitment to consult with retailers and consumer advocates over planned service improvements would also assist NBN Co in more effectively resolving issues that drive poor consumer sentiment, including through reprioritising its investment and work programs.”
The ACCC is now seeking stakeholder submissions, and notes “should NBN Co withdraw its current variation proposal and resubmit a revised one, the ACCC would then publish and call for submissions on this new proposal.”
ACCC Commissioner Anna Brakey will address this decision at today’s Comms Day Summit in Sydney
“Australia needs an efficient, reliable and affordable national broadband network to be a world-leading digital economy,” Brakey said.
“We are acutely aware that the process to vary the current NBN Special Access Undertaking has been running for two years and we appreciate the open and ongoing engagement by the sector through that time.
“This is critical, national infrastructure and to accept a variation we must be satisfied it promotes the long term interests of Australians.”
Communications minister Michelle Rowland (pictured above) acknowledged the decision earlier today.
“We are pleased that NBN Co is continuing to engage constructively in the process and has written to the ACCC setting out a number of adjustments it is planning to make to its proposal,” Rowland said.
NBN Co has also stated its intention to shortly lodge an amended proposal, providing a clear pathway to new arrangements being settled.
“The outcome of the Special Access Undertaking variation process will support the long-term interests of consumers, and promote greater regulatory certainty for industry. It would set the regulatory framework of NBN pricing until 2040.
“The draft decision by the independent regulator is a key step forward in the SAU variation process. I encourage all parties to engage in the next stage of consultation and look forward to a successful conclusion to the process which will support delivery of the government’s commitments to increase access to faster, more reliable broadband.”
