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ACCC to NBN Co: 'get cracking'

What is taking the special access undertaking so long?

Internet Security Threat Report 2014

The Australian Competition and Consumer Commission (ACCC) has threatened to step in with price regulation if it thinks that NBN Co, the company building the country's National Broadband Network, is moving too slowly.

The regulator told the NBN parliamentary committee that NBN Co has not yet lodged its "Special Access Undertaking" (SAU), which details its proposed wholesale service pricing structure. Although proposed prices have been published and discussed with service providers (and have been revised in response to criticism from companies like Internode), "lodgement" with the ACCC is required prior to formal approval.

ACCC General Manager, Communications Group, Michael Cosgrave agreed that it was expectation that it would be lodged by now, with an initial anticipation that it would have been lodged by March.

“It has been a long time in its gestation. There is no doubt about that," he told the committee.

"If you took us back 18 months or two years ago, yes, we would have expected it to be lodged by now.

However, Cosgrave did not lay blame solely at the feet of NBN Co: "Clearly there have been intervening circumstances in terms of legislation. There were some important things in the NBN access arrangements legislation that meant that the undertaking really could not be lodged until that was concluded,” he said.

He added that delays were also incurred as a consequence of the negotiation of the agreements between Telstra and NBN Co. “But we would certainly accept that there is a need for NBN Co to get on with it and get the undertaking lodged,” he said.

While NBN Co has publicly announced proposed pricing such as $AU24 per line per month for the entry level service (along with other service components), these have yet to be approved by the ACCC.

Liberal MP and former Optus regulatory executive Paul Fletcher pointed out that unless the ACCC is comfortable with every substantial aspect of the SAU, it cannot approve it. “The law does not allow the ACCC to accept some parts of the SAU and reject others. All it can do is reject the whole document while indicating the changes it would need to approve a modified document,” he said.

The Act gives the ACCC at least six months to consider the SAU, with a power to extend the timeline if required. “Unless and until the SAU is accepted, NBN Co is facing major commercial risk. It does not know whether its proposed wholesale prices will be accepted,” Fletcher claims.

The ACCC’s deputy CEO Mark Pearson added that some of the core issues that are still yet to ratified to are “completely out of our control.” He affirmed that “we do not have the undertaking finalised and we do not have the SSU or the SAU finalised. If there are any aspects of those that are built in then we would have to look at those as they come forward.”

He added, “the fundamental point that I wanted to make was that we are well aware of those risks. Some of them are not going to be issues that we as a regulator are going to be able to build in; they are going to be government issues for government, both now and in the future.” ®

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