NBN Co issues reworked SAU

Revised SAU maintains wholesale price decline over 30 years.

NBN Co lodged its revised special access undertaking (SAU) with the Australian Competition and Consumer Commission (ACCC), setting wholesale prices for the NBN for 30 years.

The revised SAU replaces the version lodged in December last year and withdrawn earlier this month. The revision responds to criticisms by Telstra and others in the industry.

“The SAU strikes a balance between the certainty we need for a significant capital investment in long-lived infrastructure, and the fact that telecommunications is a dynamic and rapidly changing industry, making it difficult to specify contractual and other terms too far in advance,” said NBN Co head of product management and industry relations, Jim Hassell.

Like the original SAU, the revised SAU freezes wholesale prices of the NBN products for five years. For the next 25 years, annual price rises on all products and services would be limited to 1.5 per cent less than inflation, with the goal of wholesale price reductions over time.

After the first 10 years, there will be an additional commitment that prices do no more than recover cost, including “appropriate return on capital,” NBN Co said.

NBN Co will use a modular structure for terms in the revised NBN, as previously detailed.

Whereas the original provided for NBN Co to recover actual costs throughout the 30-year term, the revised SAU only provides for this in the first 10 years. After that, NBN Co will submit spending forecasts for ACCC approval.

The SAU maintains ACCC oversight of NBN Co spending, service levels and customer engagement. It also lets the ACCC review the wholesale broadband contract between NBN Co and service providers every two years. The revised SAU gives ACCC oversight “on any matter not covered by the SAU,” except prices, NBN Co said.

NBN Co has committed to having multilateral discussions with customers to update contract terms, it said. It’s also committed to a two-year term for the wholesale broadband agreement.

The SAU “provides strong commitments to maintain the affordability of our wholesale prices, to develop new products in conjunction with our customers to meet emerging needs, and to incur costs in a prudent and efficient manner,” Hassell said. “In addition, the SAU also contains a transparent process for ensuring that decisions made by the ACCC are available to all our customers on a non-discriminatory basis.”

Hassell said the past nine-months consultation resolved industry concerns including how ACCC determinations would flow through into the wholesale broadband agreement as each new version is developed. “Once an accepted SAU is in place, and the next version of the Wholesale Broadband Agreement (WBA) is finalised with our customers, the key elements of the access arrangements for the NBN will be settled, providing a high degree of certainty for our customers,” he said.

The complete SAU is available on the NBN Co website.

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