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The Australian Competition and Customer Commission (ACCC) has accepted NBN Co’s latest proposed variation to its Special Access Undertaking (SAU), which includes measures designed to protect consumers from sharp price rises, reduce barriers to entry for new retailers and create incentives to fix systemic issues that drive poor NBN consumer experience.
The SAU sets the rules for how broadband providers will access the NBN over the coming decades and will apply until 2040.
“The NBN is a critical piece of national infrastructure that is central to Australia’s digital economy. Every day, millions of Australians use the NBN for work, commerce, education and entertainment,” ACCC Commissioner Anna Brakey said.
“The SAU applies ground rules to the NBN and is the regulation through which we can encourage efficient investment in and efficient use of the network.”
“We are satisfied that NBN Co’s latest SAU variation proposal promotes the long-term interests of Australians, which is the primary objective of the test that we have to apply,” Ms Brakey said.
The new SAU introduces long term pricing commitments that will restrict any annual increase in NBN Co’s average wholesale price to no more than the change in the consumer price index. This would apply until NBN Co’s revenue reaches efficient costs, which is expected to occur around 2030.
While some individual offers could still increase by slightly more than the consumer price index, this would need to be balanced by lower price increases for other offers.
“The new pricing arrangements will result in greater price stability, keeping prices in line with inflation and protecting consumers from unexpected sharp price hikes,” Ms Brakey said.
Under the new pricing structure, a new basic voice and data service will be offered at about half the price of NBN Co’s existing entry level broadband offer. Wholesale prices for 25 Mbps and 100 Mbps or faster speed services will also be reduced, offset by a small increase in the wholesale price for the 50 Mbps speed service.
NBN Co’s volume-based capacity charges will also be progressively reduced before they are completely withdrawn in 2026.
“These changes are intended to encourage more efficient use of the NBN rather than materially increase NBN Co’s revenues,” Ms Brakey said.
“The variation provides the ACCC with greater oversight of NBN Co’s future expenditure, ensuring that customers only pay for prudent and efficient investments, which will encourage efficient use of and investment in the network.”
The improved certainty of prices will also reduce barriers for retailers entering the market and seeking to expand their offering to consumers.
“Greater competition between retailers will lead to more choice and innovative products for consumers,” Ms Brakey said.
“The variation introduces a new framework for setting service standards that aims to deliver greater consistency in the quality of service that NBN Co provides to broadband providers.”
“This should mean that issues such as faulty services and connection delays will be addressed more efficiently,” Ms Brakey said.
The ACCC’s decision to accept NBN Co’s SAU variation follows more than two years of consultation between NBN Co, broadband providers, the ACCC, Government and consumer groups.
NBN Co proposed two previous variations, but these were withdrawn after the ACCC and stakeholders outlined concerns about aspects of those proposals.
“The process of updating this regulation has taken a lot of time and effort, and we are grateful for the open and honest engagement that we have had with interested parties,” Ms Brakey said.
“The SAU variation that we have accepted addresses our previous concerns and we are satisfied it meets the statutory criteria that we are required to assess it against.”
NBN Co has stated that it intends to put in place new commercial agreements with broadband providers by 1 December this year.
While the new wholesale arrangements will have important implications for consumer offers, it will be up to individual broadband providers to decide any changes to their residential and business plans.
