ACCC puts NBN access agreement under microscope

The Australian Competition and Consumer Commission (ACCC) has released a supplementary consultation paper on NBN Co’s Special Access Undertaking (SAU), which was lodged with the watchdog on 5 December, after submissions highlighted a number of issues with the agreement.

The paper (PDF) follows the initial consultation paper released by the ACCC on the SAU, which outlines regulatory commitments of the Federal Government’s National Broadband Network (NBN) that will apply until 30 June 2040.

ACCC chairperson, Rod Sims, said the watchdog was seeking comment on a broad range of issues.

“Given that this is the first SAU submitted under the new telecommunications access regime, and in light of the proposed term of the SAU and the scale of the NBN investment, this should come as no surprise,” Sims said in a statement.

“This supplementary consultation paper provides guidance on what the ACCC considers to be the key issues associated with the SAU and seeks to gain a more detailed understanding of stakeholders’ views,” the paper reads.

“The December 2011 consultation paper set out the legislative framework for the assessment of the SAU, provided an overview of the SAU, and sought stakeholders’ preliminary views on the SAU.”

According to the document, submissions received from the December 2011 consultation paper (PDF) have highlighted a number of issues with the SAU on which the ACCC has sought further comment.

One issues is that of the proposed review process, under which only NBN Co currently has the power to submit variations of the SAU over its 30 year term.

“There is no scope for the ACCC or access seekers to propose or require a variation.”

The paper has also sought views on the interaction between the SAU and NBN Co’s Wholesale Broadband Agreement (WBA), with the latter agreement subject to change by NBN Co and not assessed by the ACCC.

The absence of any service level commitments in the SAU as well as initial pricing has also been raised as an issue, with the ACCC to consider whether it will be in the best interest of end users.

“The SAU does not specify any service levels and does not make any commitments that NBN Co will comply with service levels set out in another document,” the paper reads.

“The SAU specifies initial prices for a subset of product components (the ‘price controlled offers’).

“The prices for other product components, product features and ancillary services that NBN Co will be providing at the commencement of the SAU are not specified in the SAU.”

The degree of ACCC oversight in terms of pricing is also of contention in the supplementary paper, as the SAU pricing model does not provide for periodic review of matters including NBN Co’s expenditure and its annual revenue requirements.

“Under NBN Co’s pricing methodology, NBN Co will determine key pricing elements by following ‘self-executing’ rules that are specified in the SAU.”

The watchdog will also hold an industry forum in April to discuss the issues.

Submissions close on 30 March.

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