The Australian Competition and Consumer Commission has issued a draft determination on NBN Co’s Long Term Revenue Constraint Methodology (LTRCM).

NBN Co’s LTRCM proposal sets out the values and calculations required to determine the amount of revenue NBN Co is allowed to earn each financial year to recover its costs of providing services.

“The ACCC considers that NBN Co’s proposal meets the expenditure criteria set out in the Special Access Undertaking,” ACCC Commissioner Cristina Cifuentes said.

The SAU establishes part of the regulatory framework for the National Broadband Network (NBN). The LTRCM is a reporting requirement on NBN Co under the Special Access Undertaking (SAU).

Where NBN Co is unable to recover the allowed revenue in a particular year, any shortfall is put into NBN Co’s cost recovery account. NBN Co will have the opportunity to recover its accumulated losses over time as the take-up of NBN services increases.

The values required for the LTRCM proposal include NBN Co’s actual capital and operating expenditures, the net value of NBN Co’s regulated assets and NBN Co’s accumulated losses.

The ACCC invites stakeholder views on its LTRCM Draft Determination, including reasons for those views. Submissions are due by 5pm on Friday 27 March 2015.

On 31 October 2014, NBN Co submitted its first Long Term Revenue Constraint Methodology (LTRCM) proposal to the ACCC for the 2013-14 financial year as required by its SAU.