The ACCC has benefited from discussions about a new regulatory framework for the NBN with a range of stakeholders including NBN Co, broadband retailers, consumer representatives and government agencies during the past six months.
While the discussions resolved that we need an effective regulatory framework that protects consumers, allows for a financially sustainable business and provides certainty for the industry, some issues remain unresolved, according to an ACCC paper, published today, which summarises the positions reached by stakeholder working groups considering alternative proposals for the long-term regulatory arrangements under the NBN Co special access undertaking (SAU).
NBN Co is expected to apply to the ACCC for a revision of its current regulatory model by the end of February 2022, when the ACCC will further consult with the public.
The ACCC convened the working groups after NBN Co indicated it intended to renegotiate the SAU, and industry and other interested stakeholders requested they be included in those discussions.
“Getting the right regulatory arrangements in place for the NBN is one of our key priorities, and of great importance to broadband retailers and consumers,” Commissioner Anna Brakey said.
“We are a step closer to achieving this, thanks to the contributions of all that participated in the working groups. We now have a much clearer picture of an appropriate framework that would maximise the economic and social benefits of the NBN.”
“However, a number of key risk issues and details remain to be resolved, which in our view are crucial for an efficient functioning of the NBN in the long-term interest of its users,” Ms Brakey said.
“The overall conclusion reached in the working groups was that the NBN should move to a more standard regulatory framework used in established utility businesses now that it has completed its rollout and is fully operational.”
The paper outlines a number of outcomes for a revised regulatory model, recommended by the ACCC including:
- protecting consumers from future price shocks;
- stronger incentives on NBN Co to operate efficiently;
- more cost certainty for broadband retailers that supply customers using the NBN;
- stronger service quality commitments to ensure customers know what to expect from NBN services and to address imbalances in bargaining position between NBN Co and broadband retailers;
- the opportunity for NBN Co to earn sufficient revenue to achieve an investment grade credit rating.
“In our view, a regulatory framework that achieves these outcomes will promote efficient use of the NBN, ensure future price increases are no more than necessary, and give NBN Co what it needs for efficient operation and ongoing investment,” Ms Brakey said.
“We expect that NBN Co will consider the feedback from the working groups to develop a variation to the SAU for formal assessment by the ACCC early in 2022.”
The ACCC will continue to engage with all stakeholders in 2022 before a formal submission by NBN Co and during the assessment process.
The working groups outcomes paper and other related information can be found at Review of NBN regulatory framework.
Background
NBN Co’s services are taken to be declared under Part XIC of the Competition and Consumer Act (CCA), which enables the ACCC to regulate the terms and conditions of access, such as price, to apply where the terms of access cannot be agreed.
A special access undertaking (SAU) provides NBN Co the means to propose the regulated access terms to the ACCC.
The current SAU provides a long-term regulatory framework for the supply of NBN Co’s services. The SAU has been in place since 2013 and is scheduled to operate until 2040.
A stakeholder roundtable to discuss the review of the SAU was convened in June 2021. The working groups that followed this were chaired by ACCC Commissioners and attended by representatives of NBN Co, its broadband retailers, consumer representatives, and government bodies.
They met on 17 occasions to discuss current and emerging issues under the existing regulatory framework, and to consider specific options to address these in a way that would promote the long-term interests of end-users.
The ACCC must assess any application for a variation to the SAU in accordance with the statutory criteria in Part XIC of the CCA. The ACCC must either accept or reject the SAU variation based on this assessment.
