NBN Co may have its costs examined in the back half of 2020

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NBN Co may have its costs examined in the back half of 2020

As competition watchdog sides with Telstra.

NBN Co could wind up having its costs examined in more detail in the back half of the year following a call by Telstra for greater scrutiny.

The ACCC said Friday last week [pdf] that it agreed with Telstra that existing accounting mechanisms used to track NBN Co’s expenditure “do not provide for the identification of costs and revenues associated with different services.”

As iTnews reported back in April, Telstra had been angling for a breakdown of NBN Co’s costs “by technology type and customer type” to expose the presence of any cross-subsidies between internet products.

A full cost breakdown could show the extent to which NBN Co uses its residential network to cross-subsidise its enterprise play, or the extent to which city users cross-subsidise those in regional and remote areas.

The ACCC indicated that it was unsure what the best regulatory mechanism would be to pursue granularity of NBN Co’s costs.

It noted the details could be pursued through work it will now do “to identify and quantify the extent of NBN Co’s non-commercial costs” as part of the recently-passed regional broadband scheme (RBS) or “broadband tax”.

“We also note that NBN Co has been required under previous versions of the statement of expectations to provide accounting separation reports to the government,” the ACCC said.

“We propose to commence a more detailed assessment and industry engagement on transparency requirements between commercial and non-commercial services in the second half of 2020. 

“As part of this assessment, we will consider the role of the regional broadband scheme in providing this function and the previous accounting separation requirements on NBN Co in order to identify whether additional measures are required.”

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