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NBN Co submits special access undertaking to ACCC

NBN Co submits special access undertaking to ACCC

Company agrees to keep wholesale layer two service prices fixed until 2017

An NBN Co special access undertaking (SAU) has been submitted to the Australian Competition and Consumer Commission (ACCC) which guarantees fixed wholesale prices for the next five years to service providers.

After June 2017, these charges would increase to half the rate of inflation for the next 25 years, aiming to ensure wholesale price reductions over time.

The SAU encompasses set price and non-price terms that outline the wholesaler's commitments to the ACCC and customers. It will provide access frameworks and achieve uniform national pricing of services provided by NBN Co.

The agreement, which is available on NBN Co’s website, also sets out a 30-year regulatory framework via which the company will set price and non-price terms and recover rollout costs, subject to ACCC regulation.

This agreement replaces the price mechanism that was proposed by chief executive, Mike Quiqley, in June this year which would have allowed NBN Co to increase prices for most of its services by inflation plus 5 per cent.

NBN Co head of product development and industry engagement, Jim Hassell, said in a statement that where commercial agreement could not be reached on non-price terms not covered in the SAU, or where NBN Co introduces new prices after the SAU commences, the ACCC could be called upon to settle an outcome.

“Once the ACCC has made its decision, NBN Co will make the outcome available to all our customers,” he said.

“Our corporate plan does not envisage that prices will need to rise to achieve our long-term financial objectives, and the SAU formally commits us to limits on the prices we set in the future.”

The release of the SAU follows NBN Co’s wholesale broadband agreement (WBA), the 12-month commercial contract that sets out the detailed terms for telephone and internet service providers who want to sign up to operate over the National Broadband Network (NBN).

According to Hassel, the SAU and WBA will work together to provide telephone and internet service providers with a new level of certainty on pricing and network access in the NBN world.

While the SAU has now been lodged with the ACCC, a formal process will be undertaken by the Commission to assess the agreement with the service provider industry.

“Not only does the SAU provide industry certainty if accepted by the ACCC, it is in the long-term interests of consumers and businesses because it supports the objective we have been set to offer a uniform national wholesale price for our basic services,” Hassel said.

The signing of the SAU follows calls from the telecommunications industry for regulation of NBN Co. In November, Optus chief executive officer, Paul O’Sullivan, said that unless NBN Co’s spending and pricing costs were regulated by the ACCC, consumers could end up paying more for the NBN than planned.

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Tags nbn cooptusacccMike QuigleyPaul O' SullivanJim HassellSpecial Access Undertaking

More about Australian Competition and Consumer CommissionAustralian Competition and Consumer CommissionetworkOptus

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