The Australian Competition and Consumer Commission has today released a draft variation notice setting out proposed changes to the Special Access Undertaking (SAU) offered by NBN Co.

If accepted by the ACCC, the SAU would be a key part of the framework that governs the price and other terms upon which NBN Co will supply services over its fibre, wireless and satellite networks to telecommunications companies, up until 2040.

In April this year, the ACCC made a preliminary decision that the SAU did not meet the relevant criteria for acceptance, and released a consultation paper on potential changes to the SAU.

That consultation paper flagged changes to the SAU to:

  • Reduce the complexity of the SAU and provide certainty about how NBN Co will comply with its obligations under the telecommunications access regime; specifically any ACCC regulatory rulings.
  • Allow for periodic price re-balancing through review by the ACCC. The outcome of the reviews would be that changes to price structures or relative prices must be revenue neutral in their effect.
  • Clarify that the ACCC could have a role in overseeing the withdrawal of products and the introduction of new products and their prices, should the need arise, mainly to support an effective price cap regime.
  • Remove a number of proposed non-price terms from the SAU, including those relating to service levels, in order to facilitate effective commercial negotiation.

“Submissions in response to the ACCC’s consultation paper have informed preparation of this draft notice. Specific matters which have been considered in further detail include: processes for setting revenue constraints, NBN Co’s rate of return, the scope of ‘fixed principles’ within the SAU, mechanisms relating to product introduction and withdrawal, and how tax changes should be treated,” ACCC Chairman Rod Sims said.

“NBN Co has taken a co-operative approach to the ACCC’s consultation paper, providing a constructive submission, as have various access seekers.”

“The ACCC is now offering interested parties, including NBN Co, a final opportunity to comment on the proposed changes before they are settled in a formal notice to vary,” Mr Sims said.

Interested parties have until 26 July 2013 to provide submissions on this draft notice.

Following feedback on this draft, the ACCC expects to formally issue the variation notice to NBN Co as soon as practicable. NBN Co may then make changes to the original SAU within the time period set by the ACCC, without having to lodge a new SAU. However, there is no obligation on NBN Co to vary the SAU. If NBN Co does submit a varied SAU, the ACCC will consult on it. However, if the varied SAU closely reflects the variation notice, subsequent consultations should be relatively brief given the extensive consultation that has already occurred.

In light of the complexity of the SAU and the proposed changes to it, the ACCC has also extended the statutory timeframe for making a final decision on the SAU.

The ACCC’s draft of the variation notice is available at NBN Co - special access undertaking 2012 - Draft notice to vary