ACCC rejects NBN Co special access terms

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ACCC rejects NBN Co special access terms

Updated: Vigorous retail competition sought.

The Australian Competition and Consumer Commission is "not satisfied" with NBN Co's revised special access undertaking (SAU) and has proposed a number of changes in its draft SAU decision.

Set to last until 2040, the SAU is the key mechanism of the framework that governs prices and terms for services supplied over fibre, satellite and wireless networks by NBN Co.

The ACCC today said the current SAU does not meet the relevant criteria for acceptance.

This is the third time NBN Co's SAU has been sent back for revisions by the ACCC. An initial undertaking was submitted to the ACCC by NBN Co in December 2011, and was withdrawn in September the next year.

The present text was revised in December last year, as NBN Co developed its contracts with extensive multi- and bilateral consultation with customers.

The ACCC recognised several features included in the current SAU as having merit, including its modular design and initial pricing to allow for smooth network transition. But the regulator stressed that it was important the rights and obligations imposed on NBN Co and access seekers were reasonable, in the long-term interest of users, and clearly expressed and understood.

NBN Co will receive a formal notice from the ACCC to alter the SAU in May. The competition watchdog will ask the network operator to provide certainty as to how it will comply with the regulator's rulings.

“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," ACCC chairman Rod Sims said.

"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."

NBN Co said in a statement the ACCC's draft decision was the necessary and anticipated next step in the process of developing the new regulatory framework. 

“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," said NBN Co head of regulatory affairs and industry analysis, Caroline Lovell.

"We will continue to engage with industry and the ACCC as the remaining issues are resolved to ensure that an appropriate balance is achieved."

The ACCC will also seek a periodic rebalancing of prices through reviews. It wants clarification on its role in overseeing product withdrawals and the introduction of new services and their costs.

The consumer watchdog has released a consulation paper on the above variations.

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