iTWire - ACCC has 'favourable view' of NBN Co's revised SAU, seeks input
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Thursday, 24 August 2023 11:02
ACCC has 'favourable view' of NBN Co's revised SAU, seeks input Featured
By Sam Varghese
The Australian Competition and Consumer Commission has indicated that it has a favourable view of the revised Special Access Undertaking submitted by NBN Co, the company rolling out Australia's national broadband network, last week.
In a statement on Wednesday, ACCC commissioner Anna Brakey said: "Our preliminary view is that NBN Co’s revised variation is a material improvement on its previous proposal,
“The revised variation appears to address the concerns that led us to make a draft decision to reject the previous proposal. It also appears to respond appropriately to the further issues that have arisen in recent months.”
The new variation includes a top price of $55 in the financial year 2024 for speeds under 50Mbps. It will also have a minimum price for 12, 25, 50 Mbps fixed line and fixed wireless wholesale speed tiers.
The consumer watchdog said it would make a final decision after considering the revised variation would favour long-term interests of Australian consumers and businesses.
“We are providing stakeholders with an opportunity to raise any new or residual issues that they would like us to consider in making our decision on whether to accept or reject this latest variation proposal,” Brakey said.
“We recognise this has been a drawn-out process, with NBN Co submitting and withdrawing two previous proposals, and we thank industry for their constructive engagement.
"We remain committed to reaching a timely resolution for the SAU so that new commercial arrangements can take effect in a timely manner.”
Highlights of the new SAU:
- Removal of CVC charges and introduction of AVC-only pricing for the NBN Home Fast (100 Mbps) and above wholesale speed tiers as soon as possible following ACCC acceptance and WBA5 implementation.
- Establishing a minimum "floor" price for the 12, 25, 50 Mbps fixed line and fixed wireless wholesale speed tiers and a maximum "ceiling" price at no more than $55 in FY24, regardless of the volume of data used.
- Retaining the $50 bundle price from the November SAU Variation as the "floor" price for the industry’s most popular 50Mbps service, together with CVC inclusions for the 50Mbps service increasing by 40% (from 2.5Mbps to 3.5Mbps) from WBA5 implementation.
- The 25Mbps wholesale bundle price will be reduced to $26 and the 12Mbps wholesale bundle price will be reduced to $24.40, for fixed line and fixed wireless products.
- For the 12, 25 and 50Mbps wholesale speed tiers, the CVC TC-4 overage rate will be reduced from $8/Mbps to $5.50/Mbps from the Price Transition Date in FY24 and the rate will be reduced to $4.50/Mbps in FY25 and $3.50/Mbps in FY26. TC-4 CVC overage charges will be removed from all fixed line and fixed wireless products by 1 July 2026.
- Significant CVC operational improvements via the introduction of "as utilised" rather than "pre-provisioned" CVC charges across the 12, 25 and 50Mbps fixed line and fixed wireless wholesale speed tiers.
- Reducing prices for some Network-to-Network Interface services in 2024 and committing to complete a price review of NNI prices by the end of FY2027.
- Introduction of a Weighted Average Price Control that will initially cap overall annual wholesale price increases on average at CPI, ensuring overall average wholesale prices do not increase in real terms.
- Limiting future wholesale price rises by materially limiting NBN Co’s drawdown of the Initial Cost Recovery Account to $12.5 billion (in 2023 dollars) over the term of the SAU, from $44 billion at 30 June 2023. The ICRA is a recognised regulatory concept that reflects NBN Co’s unrecovered costs to date; it is not a write-down in the carrying value of the company or the value of its assets.
- Setting benchmark service standards for each regulatory cycle, with ACCC oversight, and how nbn will engage with stakeholders in understanding RSP priorities for service improvement initiatives, and how these may result in improved Benchmark Service Standards and RSP experience.
- NBN Co will ensure the Low-Income Forum allows member organisations and industry groups to provide views and feedback on a range of matters and enhancing NBN Co’s related public reporting commitments.
- Provisions to allow the ACCC the discretion to reset the regulatory framework from 2032.
- To assist with some of the costs associated with usage growth and transitioning NBN Ethernet TC-4 services to the new pricing construct, NBN Co has offered to provide a total of $20 million in transitional credits to RSPs.
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