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ACCC Pricing Issues With NBN

Competition watchdog, the Australian Competition and Consumer Commission, released its first consultation paper on the NBN Co’s Special Access Undertaking (SAU) lodged in September.

The watchdog has highlighted concerns with “commitments” the NBN Co is proposing to make to retailers to enable them to provideĀ  services to end-users, “at a comparable price and quality today” will ensure a smooth future transition to the high speed fibre network, to be rolled out by 2021.

The ACCC also said it “will be considering whether the right products are offered at the right price” by NBN Co and the implications of the commitment it has made for broadband prices to fall over time.

The NBN Co’s controversial ‘usage’ based charge proposals (known as the ‘connectivity virtual circuit) and its implications forĀ  take up of NBN services are other key issues being considered by ACCC.

It is also to investigate whether “more binding pricing commitments to lower the usage based charge are required,” from the NBN Co, it said today.

The SAU, if accepted by the ACCC, will be the key framework that governs price and terms upon which NBN Co will supply services to telcos like Optus, Telstra and iiNet.

The regulatory agreement will last 30 years, hence why the watchdog is going over the undertaking with a fine tooth comb.

“There are many complex issues of detail and drafting to be assessed and debated before the ACCC can determine whether it is reasonable and promotes the long term interests of end-users,” ACCC Chairman Rod Sims said.

Other issues of concern cited in today’s statement include the commitments the national broadband company is making around the development and withdrawal of products, the levels of service quality, and whether to introduce penalties for non-compliance of service delivery.

NBN Co are offering fixed fibre, wireless and satellite broadband services nationally, promising max speeds of one gigabit per second.

The consultation paper seeking the views of consumers and industry and the ACCC is host a stakeholder forum in December.

Interested parties have until 11 January 2013 to make submissions to the consultation paper.

The ACCC says it expects to release a draft decision on whether to accept the SAU in March next year .

The SAU is available at http://www.accc.gov.au/content/index.phtml/itemId/1080594.