ACCC rules in favour of nbn Co’s 2014-15 revenue controls

ACCC rules in favour of nbn Co’s 2014-15 revenue controls

Issues final determination on nbn Co’s revenue controls


The Australian Competition and Consumer Commission (ACCC) has issued a final determination on nbn Co’s revenue controls for 2014-15, determining that its prices did not exceed maximum regulated prices during the 2014-15 financial year.

The final determination follows the ACCC’s draft determination that was released in March, which proposed to accept nbn Co’s proposal.

As part of the Schedule 1E.1.2 of the Special Access Undertaking (SAU) - a key component of the regulatory framework for the nbn - the ACCC needs to publish an annual Long Term Revenue Constraint Methodology (LTRCM) determination in respect of the Annual Building Block Revenue Requirement (ABBRR), the Regulatory Asset Base (RAB) and the Initial Cost Recovery Account (ICRA) for the initial regulatory period.

In making its determination, the ACCC is required to assess whether nbn Co complies with the relevant criteria, including prudency criteria, set out in the SAU.

The regulatory information submitted by nbn Co includes information about its compliance with the price controls set out in the SAU, including forecasts on its capital expenditure, operational expenditure, and asset disposals models.

ACCC commissioner, Cristina Cifuentes, said the purpose of the revenue controls is to ensure nbn Co has the opportunity to recover its long-term costs over the duration of the SAU and those costs are incurred in a prudent and efficient manner.

“The ACCC is satisfied that the values proposed by nbn Co for 2014-15 for determining allowable revenues for 2014-15 are consistent with the revenue control provisions in the SAU,” Cifuentes said.

The ACCC has also finalised an amendment to the 2013-14 determination to correct a minor error in nbn Co’s submission for that year.

nbn Co is expected to submit its LTRCM proposal on October 30.

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