ACCC accepts varied SAU for National Broadband Network

ACCC accepts varied SAU for National Broadband Network

The SAU will form a key part of the framework for governing prices and other terms upon which NBN Co will supply services

The Australian Competition and Consumer Commission has accepted the varied Special Access Undertaking (SAU) lodged by NBN Co on November 19.

The varied SAU incorporates all of the changes in the ACCC’s notice to vary and replaces the undertaking submitted by NBN Co in December 2012.

The SAU will form a key part of the framework for governing prices and other terms upon which NBN Co will supply services to telecommunications companies over the NBN until 2040.

ACCC chairman Rod Sims said the acceptance of the SAU was a key milestone in establishing regulatory arrangements for the NBN.

“It is part of a broader set of regulatory and structural reforms that have occurred across the industry in recent years,” he said.

“The SAU will form the basis for how NBN Co can set its prices and change its product offerings over time. It will also form the basis for ACCC oversight of NBN Co’s allowable revenues and prices.”

The SAU will operate until June 2040.

The decision to accept the SAU follows two years of extensive consultation and assessment by the ACCC.

In April this year, the ACCC released a draft decision indicating that the SAU submitted by NBN Co in December 2012 did not meet the relevant criteria for acceptance.

The ACCC then consulted on a draft notice to vary in July on the detailed changes required to address the ACCC’s concerns. The ACCC gave its final notice to vary to NBN Co in October 2013.

This process followed the submission and withdrawal of two previous undertakings dating back to December 2011.

Sims said it was a vastly different SAU than the version first submitted by NBN Co two years ago.

“Through the changes the ACCC requested and NBN Co has made, it is now a much more balanced instrument,” he said.

The acceptance of the SAU by the ACCC provides the broad regulatory framework to facilitate effective engagement between NBN Co and access seekers to negotiate commercial agreements.

A spokesperson for the ACCC said it understood that a Wholesale Broadband Agreement (WBA) was currently under negotiation in the expectation of the SAU being accepted by the ACCC.

The ACCC recognises that there is some uncertainty around the NBN, especially in light of the upcoming reviews of the NBN, according to an ACCC statement.

"While this may have implications for the SAU, most of the commitments in the SAU are technology neutral and will apply even with a significant change in network design."

Sims said: “If, however, NBN Co wishes to vary the undertaking in the future in light of any new directions from the government, this can be accommodated,” Sims said.

NBN Co may also withdraw the SAU at any time, by giving 12 months’ notice.

NBN Co’s Head of Regulatory Affairs and Industry Analysis, Caroline Lovell said, NBN Co welcomes the certainty provided by today’s decision.

“Having an accepted SAU in place, establishes a baseline from which future regulatory decisions can be made. It also provides a settled basis for finalising the next set of commercial arrangements with our customers," she said.

“The process has taken some time, but it was important to make sure the SAU delivered a workable approach that would serve the needs of all parties, including consumers, over an extended period.

“NBN Co also wishes to acknowledge the considerable investment of time and effort made by the ACCC and industry stakeholders in the SAU process."

While the SAU was developed in the context of previous government policy, NBN Co considers – and the ACCC acknowledges – that the SAU should be flexible enough to be varied to respond to future technology changes that may be required.

The SAU and the ACCC’s final decision are available on the ACCC website.

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Tags NBNAustralian Competition and Consumer CommissionRod Sims

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