The rollout of the National Broadband Network has hit another snag after the competition watchdog rejected a plan from the company regarding its pricing, and said it should be subject to more regulatory oversight.
The ruling comes after several weeks of negative reports about the NBN, with the company confirming it is running behind on construction targets. Separate reports have indicated turmoil between the NBN Co and its construction suppliers.
The NBN Co special access undertaking, which sets out a number of the rules and conditions of how the network operates, has been rejected.
ACCC chairman Rod Sims said the watchdog is suggesting a number of changes, mainly concerned with regulatory oversight and pricing.
Proposed amendments include drafts to add certainty about how the NBN Co would comply with obligations under the telecommunications access regime, and allow for regular price re-balancing.
The ACCC also wants power to have a role in overseeing the withdrawal of products, the introduction of new products and their prices, “mainly to support an effective price cap regime”.
Designed to be in use until 2040, the special access undertaking is the document which outlines prices and other details of how the NBN Co actually works.
This is now the third time the special access undertaking (SAU) has been forced to undergo a revision.
“An SAU varied in line with the ACCC’s proposals would provide considerable certainty to NBN Co that it will be able to recover the prudent costs of its investment, subject, of course, to demand for its services meeting expectations,” ACCC chairman Rod Sims said.
Chris Coughlan, an independent telecommunications analyst, told SmartCompany rejecting the agreement was the right thing.
“It was generally expected the SAU would be rejected, pretty much everyone in the industry was unhappy with it,” he says.
“They have a list of things to change now, and NBN Co will probably work with the ACCC to file a revised version. If they take everyone on board, there’s no reason why it wouldn’t be rejected again.”
One of the major problems with the SAU was that it sought to have too much power over pricing. As part of its rejection, the ACCC is saying it wants to be able to regularly review price structures and whether they should be changed.
Some proposed amendments would also push the NBN to develop new services and products.
Coughlan says the rejection of the plan isn’t a big deal for the rollout of the network, but says any amendments will need to be considered carefully.
“I think it was the right thing to do to reject it,” he says.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
