ACCC suspends assessment of NBN Co’s SAU in expectation of revisions

20 Jun 2012

The Australian Competition and Consumer Commission (ACCC) has announced that it is suspending its assessment of the Special Access Undertaking (SAU) lodged by NBN Co, the public-private company set up to oversee the construction and management of the National Broadband Network (NBN). The decision, the regulator noted, was the result of ‘the expectation that NBN Co will soon lodge a revised undertaking,’ with NBN Co reportedly having already provided an outline of its proposed amendments to the ACCC. ‘NBN Co has taken a step forward in developing this proposal in response to feedback on its original SAU. It is a constructive move towards establishing reasonable access arrangements for the NBN,’ ACCC Chairman Rod Sims said of the development, adding: ‘The ACCC sees merit in the proposal. For example, the proposed modular design balances NBN Co’s requirement for certainty on long-term cost recovery with the need to undertake regular reviews of the detailed terms of access … Similarly, the proposal that the revised SAU will specify reference offers and use a building block model to determine revenue constraints on NBN Co appears to provide some reasonable constraints on NBN Co’s pricing over time.’

Mr Sims, meanwhile, reiterated the ACCC’s expectation that the regulatory framework established by the SAU should be in place prior to the execution of longer term Access Agreements between NBN Co and access seekers. With existing contractual arrangements set to expire before the end of 2012, the ACCC will reportedly work with NBN Co with a view to lodging any amended undertaking as quickly as possible, although any revisions will be subject to a fresh round of formal consultation as part of the regulator’s assessment process. As such, it has been suggested that the ACCC is unlikely to be able to complete its assessment of a revised SAU before the end of this year, meaning that NBN Co and access seekers will likely need to agree upon interim contractual arrangements.

As previously reported by CommsUpdate, NBN Co originally submitted its SAU, which will work in tandem with NBN Co’s wholesale broadband agreement (WBA), and sets out the terms of access to the in-deployment fibre infrastructure over the life of the operator’s 30-year corporate plan, in December 2011. The SAU details commitments made by NBN Co with regards to the pricing of services over the NBN in the long term (until 2040), while also setting out any non-price conditions of supply and outlining measure under which it can ensure that it will not recover more than its incurred costs to build the network. By comparison, the WBA, which NBN Co released at the end of November 2011, sets out the commercial arrangements between NBN Co and retail service providers over shorter periods.