The government will treat the National Broadband Network as a public utility rather than a moneymaking scheme, under a major new broadband policy.
In turn, NBN Co. has formally withdrawn its ACCC application known as the Special Access Undertaking, which would have seen telcos and therefore customers pay a lot more for broadband, with prices rising ahead of inflation through to 2040.
NBN argued that these hikes were necessary for the profitability of the $51 billion scheme, which is currently $35 billion in the red, compounding at 6 per cent a year.
Under the “changed policy landscape”, NBN will now submit a new proposed variation that reflects the changes. The SAU was based on the presumption the NBN would have to recover costs and run at a profit.
“At the core of the Albanese government’s priorities are the long-term interests of Australian consumers. This means affordable prices and a quality, resilient network,” Communications Minister Michelle Rowland said.
Rowland said NBN’s Special Access Undertaking proposal was based on a view to privatisation, which is no longer the case.
“The government has stated that it will retain NBN Co in public ownership for the foreseeable future, expand full-fibre access to more homes and businesses and to ensure the NBN delivers for consumers and facilitates productivity,” Rowland said.
“We understand that any variation to the SAU will need to have some regard to the past. This could mean historical concepts such as the Initial Cost Recovery Account (ICRA) could be changed or reconsidered to facilitate a focus on a forward-looking regulatory model for the business.”
NBN Co chief executive Stephen Rue said the new framework will mirror government policy objectives.
“The policy landscape has changed since we submitted our original proposal,” Rue said.
“Therefore, we are pleased to be able to withdraw our earlier submission and submit a revised proposal that takes this into account.”
