ACCC publishes draft determination on nbn’s revenue controls

16 Mar 2016

A draft determination on nbn’s (formerly NBN Co’s) revenue controls for the 2014-15 period has been published by the Australian Competition and Consumer Commission (ACCC). In a press release announcing the determination, the regulator also confirmed that it did not believe prices set by nbn, which is overseeing the country’s National Broadband Network (NBN) project, had exceeded maximum regulated prices during the 2014-15 financial year.

The ACCC is required to make annual determinations on nbn’s revenue controls in accordance with the Long Term Revenue Constraint Methodology (LTRCM) set out in the latter’s special access undertaking (SAU); the SAU itself establishes part of the regulatory framework for the NBN and includes important provisions to encourage nbn to incur expenditure efficiently.

In making its draft determination, the ACCC is proposing to accept nbn’s actual capital and operating expenditure for the year, while the watchdog has also decided to accept the proposed values for regulated assets and accumulated losses. In its proposal, meanwhile, nbn requested a minor amendment to the ACCC’s 2013-14 determination to correct for an error in its submission; the ACCC will reportedly consider this proposed amendment in the same process as the draft determination. Stakeholder views have now been invited on the draft determination for 2014-15, including reasons for those views, with submissions due by 15 April 2016.

Commenting on the matter, ACCC commissioner Cristina Cifuentes was cited as saying: ‘Having assessed nbn’s proposal against the methodology in the SAU, the ACCC has made the draft decision to accept the values proposed by nbn for determining allowable revenues for 2014-15 … Where nbn is unable to recover the allowed revenue in a particular year, any shortfall is put into nbn cost recovery account. Nbn will have the opportunity to recover its accumulated losses over time as the take-up of NBN services increases.’