NBN Co submits proposed SAU variation with ACCC

NBN Co submits proposed SAU variation with ACCC

Follows a detailed consultation with ACCC, internet retailers, consumer advocacy group and the government.

Credit: Supplied

NBN Co has lodged its proposed Special Access Undertaking (SAU) variation and supporting document with the Australian Competition and Consumer Commission (ACCC). 

NBN Co has made significant additional modifications to its proposed SAU variation following detailed consultation with the ACCC, internet retailers, consumer advocacy groups and the government. 

In a statement, NBNCo said it was committed to implementing new wholesale prices by 1 July 2023 if the SAU variation is accepted by 31 March 2023. If that deadline is missed, it will implement the new wholesale prices within three months of ACCC’s acceptance.

“We are making the necessary investments to keep ahead of national data demand and helping to unlock social and economic benefits by pushing fibre deeper into communities and extending fixed wireless and satellite coverage and capabilities,” NBN Co CEO Stephen Rue said.

“Our proposed SAU Variation puts the responsibility and investment risk on nbn to meet the expected growth in data demand over the next two decades, while earning the minimum revenues required to invest in the network to deliver faster speeds and greater capacity to customers.

 The variation featured removing of CVC (capacity) charging and introduction of AVC-only pricing for the nbn Home Fast (100 Mbps) and above wholesale speed tiers within three months of acceptance.

Significant wholesale price reductions to key higher speed tiers and new entry level 25 Mbps offers were also put forward. 

Specifically, annual reductions in CVC charges leading to the complete removal of CVC charges and introduction of AVC-only pricing across the 12, 25, 50 Mbps fixed line and fixed wireless wholesale speed tiers by 1 July 2026. This applies to TC-4 CVC charges only, not TC-1 and TC-2 CVC charges. The annual reductions in CVC charges do not apply to 12/1 and 25/5 Mbps Satellite services.

“The phased removal of CVC charging on entry level and mid-speed tiers on fixed line and fixed wireless seeks to minimise short-term retail price increases that would likely occur if we accelerated the removal of CVC charges across all speed tiers, which we believe would be unfair to light internet users,” Rue said. 

Significantly reduced wholesale combined charges on 25 Mbps and Voice Only (12 Mbps), along with reduced wholesale prices for high-speed tiers are balanced against a marginal increase in the combined charge of the 50 Mbps fixed line and fixed wireless wholesale speed tiers.

Significant CVC operational improvements via the introduction of ‘as utilised’ rather than ‘pre-provisioned’ CVC charges across the 12, 25 and 50 Mbps fixed line and fixed wireless wholesale speed tiers, which has been retained from the withdrawn March Variation.

A Weighted Average Price Control (WAPC) will also be introduced that will initially cap overall annual wholesale price increases on average at CPI, ensuring NBN Co’s average prices cannot increase in real terms.

Limiting drawdown of the Initial Cost Recovery Account (ICRA) to $12.5 billion (in 2023 dollars) over the term of the SAU along with setting benchmark service standards for each regulatory period, with ACCC oversight.

Provisions to allow the ACCC the discretion to reset the regulatory framework from 2032 was also on the table along with automatic expiration of the SAU before 2040 if a future Government relinquishes control of NBN Co.

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