NBN Co's SAU no longer effective, ACCC commissioner says

The set of rules meant to govern the way NBN Co operates until 2040 “hasn’t operated in the way the ACCC and industry intended”, and needed more than a simple “tidy-up” to fix, ACCC commissioner Anna Brakey said.

NBN file photo.

Speaking at the CommsDay Summit yesterday, Brakey said that “establishing a sustainable long-term  regulatory framework for the national broadband network” is the commission’s “top priority for the communications sector at the moment.”

NBN Co is expected to lodge a revised version of these rules - collectively known as the special access undertaking or SAU - imminently.

It has already floated proposals on how it might suggest changes to its pricing construct, though the feedback to date from industry is that the proposals do not go far enough.

Brakey indicated that the ACCC had an appetite for change, given it had accepted the initial SAU from NBN Co in 2013, but that the arrangement had proven largely ineffective since at keeping NBN Co in check.

“In 2013, we accepted a special access undertaking from NBN Co. The undertaking was intended to act as the overarching long-term framework for the supply of NBN Co’s wholesale services until 2040,” Brakey said.

“In 2022, however, it is clear the undertaking is deficient for a range of reasons. Most importantly, it no longer acts as an effective regulatory framework.

“Probably more importantly, the undertaking hasn’t operated in the way the ACCC and industry intended.

“It hasn’t delivered the high degree of certainty about NBN Co’s product set and price changes over time that it was established to provide.”

Brakey said the fact that almost all NBN Co services are priced in a way they sit “outside the SAU framework and … therefore bypass many of the protections it was intended to deliver” meant broader change was needed.

The commission is also concerned about the “significant balance” NBN Co has accumulated in a loss capitalisation account.

“Depending on how this is treated in the regulatory arrangements, it has the potential to drive prices much higher than they need to be,” Brakey said.

“We do have concerns that the pursuit of past losses will mean NBN Co could generate much more revenue than it needs. 

“This will translate to much higher prices in future than necessary. It will also discourage efficient use of the network, and mean we are not maximising its benefits.”

Brakey said the ACCC would pay close attention to the revised SAU “to protect consumers from price shocks, and from prices that track higher than necessary in future.”

She urged the industry to “act together”, to engage constructively, and to approach the SAU renegotiation always with the NBN user in mind.

“I understand that stakeholders have different interests in this, but if we can listen and engage on the issues, we can really make this process work,” she said.

Aussie Broadband’s managing director Phillip Britt told the same conference today that the telco industry "is holding its breath waiting for the new NBN SAU."

Britt said there was "no certainty" for RSPs and that the process continues to drag on "with NBN playing a cat-and-mouse game with the ACCC and industry."