ACCC issues draft decision on nbn’s proposed SAU variation; confirms dismissal of Telstra’s appeal on FADs

28 Mar 2017

A proposed variation to nbn’s Special Access Undertaking (SAU) allowing for the inclusion of technologies such as fibre-to-the-node (FTTN), fibre-to-the-building (FTTB) and HFC has been rejected by the Australian Competition and Consumer Commission (ACCC). The SAU is a key part of the framework for regulating prices and a range of non-price matters relating to the company’s supply of wholesale services via the National Broadband Network (NBN) until 2040. The current version of the SAU, which the ACCC accepted in 2013, only covers fibre-to-the-premises (FTTP), fixed wireless, and satellite technologies.

In announcing a draft decision on the matter, ACCC chairman Rod Sims said: ‘Most of the changes proposed by [nbn] would remain in effect until the end of the SAU term in 2040. We need to be satisfied that the proposed changes are reasonable and in the long-term interests of end-users now, and will remain so over the term of the SAU … While the ACCC agrees with the overall approach that [nbn] has taken to incorporate the additional technologies into the SAU, it has concerns about some of the specific terms and conditions that [nbn] proposes to vary.’

With the ACCC only able to either accept or reject an SAU variation, the regulator said that it has provided ‘clear guidance’ in its draft decision as to how nbn can address its concerns and introduce the new technologies to the undertaking. Alongside this, the regulator has said it is also seeking further views related to the SAU pricing provisions that would apply to NBN services provided over these additional technologies. Having not examined this area in its previous consultation, the ACCC said it was consulting specifically on its assessment of the price terms and conditions ‘to ensure that all stakeholders have an opportunity to comment’. In addition, the ACCC will also consult further on proposed changes to nbn’s rollout information commitments. A closing date of 21 April 2017 has been set for submissions.

Separately, the ACCC has confirmed that the Federal Court of Australia has dismissed an application from fixed line incumbent Telstra for a judicial review of the regulator’s fixed line services final access determinations (FADs) that were made in October 2015. In the determination, the ACCC called for a one-off uniform cut of 9.4% in access prices from previous levels for the seven declared fixed line access services, specifically: unconditioned local loop service (ULLS); line sharing service (LSS); fixed originating access service (FOAS); fixed terminating access service (FTAS); wholesale line rental (WLR); local carriage service (LCS); and wholesale ADSL.

Telstra previously claimed that the regulator’s pricing decision would lead to under-recovery of costs from its supply of declared fixed line services, but the Court rejected all of Telstra’s grounds of review. In light of the ruling, which Mr Sims said would ‘help provide some predictability and stability in access prices over the four-year period of the determination while the NBN rollout is completed’, he added: ‘The ACCC’s determinations meant that the remaining users of Telstra’s network shouldn’t pay higher costs due to a shrinking customer base on the copper network as others migrate to the NBN … The Court has recognised that ACCC decisions involve evaluating a range of competing factors, and that our role as the regulator is to consider all relevant information to arrive at an outcome that will promote the long-term interests of end-users.’