ACCC rejects NBN Co’s latest SAU variation proposal

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Image credit: NBN Co

CommsUpdate: The Australian Competition and Consumer Commission (ACCC) has rejected NBN Co’s proposed variation to its Special Access Undertaking (SAU).

The ACCC announced the publication of its draft decision following what it termed “a thorough assessment” which had been “informed by constructive and extensive engagement with NBN Co, Retail Service Providers, consumer representatives and other stakeholders.”

ACCC Commissioner Anna Brakey said in a statement accompanying the draft decision, “The ACCC can only decide to accept or reject NBN Co’s variation proposal, and our draft decision today is to reject this proposal.”

That said, she noted that the ACCC identified a number of aspects of the proposal that “reflect issues raised in the ongoing industry consultation process and which represent a significant improvement on the current SAU and earlier variation proposals.”

Brakey added: “We have also outlined some specific issues NBN Co could address to accelerate the pathway to an acceptable variation.”

ACCC says proposal won’t benefit consumers in long term

The ACCC said it was not satisfied that the proposed variation would result in access terms that promote the long-term interests of consumers over its duration, due to limitations in the processes under which those terms of access are periodically reset.

Meanwhile, it also noted that it considered the proposal would require revenue allowances from 1 July 2032 “that would not create incentives for a regulated entity to act efficiently.”

Further, the Commission also considered that NBN Co’s proposed access terms for the first three years following acceptance of the variation would “pose risks to efficiency and competition.”

The ACCC said this is because the cost of services supplied using the standard wholesale offer would fall over a very wide range, and the variation would not commit NBN Co to providing suitable measures to assist retailers with this residual cost uncertainty.

This is NBN Co’s second try

As previously reported by TeleGeography’s CommsUpdate, NBN Co submitted a revised SAU variation back in November 2022, having withdrawn an earlier proposal in July that year after a consultation by the ACCC had identified “a range of potential issues” with the initial plans.

The SAU provides a framework for the economic regulation of the National Broadband Network (NBN) until 2040, and includes rules for setting the maximum prices and service standards that NBN broadband providers can expect to receive.

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