Telcos demand more power for ACCC in NBN Co SAU

Insufficient regulation and oversight by the consumer watchdog in the special access undertaking is a concern for some telcos.

Telcos are worried about the insufficient powers the Australian Competition and Consumers Commission (ACCC) can wield over the National Broadband Network (NBN) under NBN Co’s special access undertaking (SAU).

NBN Co lodged its SAU to the ACCC in December last year. The SAU and wholesale broadband agreement (WBA) will work together to determine the terms and pricing for NBN access seekers such as ISPs.

While the WBA sets out commercial agreements between NBN Co and its customers over a shorter period of time, the SAU will affect price and non-price terms of the NBN for the next 30 years. This applies to NBN fibre, wireless and satellite services.

The ACCC will have oversight over a number of NBN-related issues under the SAU but some telcos are asking for even more power to be granted to the consumer watchdog.

ISPs cannot acquire services under the SAU without a WBA with NBN Co, of which the terms are determined solely by the NBN company. Telstra and Vodafone Hutchison Australia (VHA) are both concerned by the lack of regulation over the matter.

“This is unreasonable,” Telstra said in its submission to the ACCC as part of a public consultation. “A WBA can only be ‘overridden’ by the NBN Co SAU if WBA provides for this… There is no self-effecting regulatory mechanism or statutory right for the ACCC to intervene to otherwise give effect to the SAU.”

VHA, while slightly comforted by the powers already invested in the ACCC by the SAU, said regulatory oversight is still lacking in a number of areas in the undertaking.

“[Our] principal concern with the SAU is that it does not provide for sufficient ACCC involvement and oversight in the negotiation and ongoing application of the WBA,” VHA said. “[I]t is imperative NBN Co remains accountable to the ACCC [since it be] will an effective monopoly in many locations through Australia.”

iiNet, Internode and TransACT’s are also concerned by the fact a WBA’s terms can override that of the SAU and ACCC access determinations. This is in accordance with Part XIC of the Competition and Consumer Act 2012.

Should any inconsistency arise between the SAU, the ACCC’s set regulated terms and a WBA, the latter will have more weight. This may be used by NBN Co to bypass regulatory oversight by the ACCC.

“NBN Co is able to provide services under terms and conditions that have not been approved by the ACCC, and in the event the ACCC concludes it is necessary to make regulated terms applicable to NBN Co, the WBA will override those regulated terms,” according to Herbert Geer Lawyers which represents iiNet, Internode and TransACT.

The group proposed that NBN Co includes a “Pass Through Clause” in the WBA to prevent the terms of the SAU being superseded by the WBA.

Telcos also want the ACCC to have more input over pricing of new NBN products.

Other issues raised by the telcos include the excessive length of the SAU’s 30-year term, lack of provisions for NBN Co to review the SAU, weakness of “prudency of expenditure” commitments by NBN Co and certainty over whether NBN Co’s ability to supply ongoing services.

The SAU is subject to ACCC approval. The watchdog is continuing its public consultation on the SAU and must make a decision on whether to approve it by mid-year.

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