ACCC wants NBN Co's revenue and expenditure forecasts

NBN Co has been asked to provide details on how it developed forecast figures for expenditure, demand, price and revenue.

The Australian Competition and Consumer Commission (ACCC) has requested NBN Co provide additional information on revenue and expenditure for its Special Access Undertaking (SAU) it lodged in September last year for the NBN.

In a letter to the company, the ACCC has asked NBN Co to provide more information on how the SAU will operate over its 30-year term.

NBN Co has been asked to provide details such as forecast capital expenditure; forecast values of ‘construction in progress’; forecast operating expenditure; and the forecast value of asset disposals for every year of the SAU period.

The ACCC has also requested NBN Co provide data on forecast demand and prices for product components and features on the NBN access service and revenue from new products.

NBN Co has also been asked to provide details on how it developed forecast figures for expenditure, demand, price and revenue.

“This information will be used to model the implications of a range of cost, demand, pricing and revenue scenarios for the long-term revenue constraint methodology in the SAU over the SAU term,” the ACCC said.

“This will provide the ACCC with a more informed view on the expected length of the initial cost recovery period, and likely incentives generated by the SAU price controls.”

The ACCC said it was seeking the information to assess how revenue and expenditure would impact on changes in levels of demand and how different products are priced.

NBN Co has been given until 12 February, 2013 to provide the additional information. If it fails to do so, the ACCC can make a formal request for it under legislation.

NBN Co lodged its first SAU in December 2011. The first SAU was criticised by telcos and ISPs, which voiced concerns about NBN Co’s flexibility over pricing.

The ACCC suspended its assessment of the first SAU, with NBN Co lodging a revised document in September last year.

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.

Follow Stephanie McDonald on Twitter: @stephmcdonald0

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Tags Australian Competition and Consumer Commission (ACCC)nbn coNational Broadband Network (NBN)special access undertaking (SAU)

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