NBN Co lobs revised pricing options for ACCC’s approval

The company is hoping retailers and the competition watchdog will accept its latest proposals after suffering multiple rejections.

The SAU will likely provoke feedback and discussion among retailers, particularly ahead of Telstra’s full-year results on Thursday. Picture: Bloomberg

NBN Co has lobbed revised pricing and regulatory proposals, known as the Special Access Undertaking (SAU), to the competition and consumer watchdog, after its previous proposals were rejected in May.

The SAU sets wholesale price controls and minimum service standards for the NBN network, and the ACCC, NBN Co and retailers have been trying to agree on a new variation since early 2021. NBN Co lodged its revised proposals on Monday and they were published on Wednesday, along with a new three-year price plan.

“NBN Co has lodged the revised variation in response to issues raised by the ACCC and feedback provided by stakeholders since the draft decision,” ACCC commissioner Anna Brakey said.

The ACCC will publish a consultation paper for the revised variation next week, with the consultation period to run until September 13. “While allowing time to undertake genuine consultation we are seeking to expedite the remainder of this process to allow the industry to adopt the new arrangements in a timely manner,” Ms Brakey said.

“We recognise this process has extended over several years and see today as a significant milestone towards achieving a robust and effective regulatory framework for the NBN that will last well into the future.”

NBN Co chief executive Stephen Rue. Picture: Britta Campion

The key proposals in NBN Co’s latest submission include axing controversial CVC pricing in favour of a “pay as you go” model for retailers, but only for higher-tier speed plans. NBN Co would also establish a minimum floor price for its 12, 25 and 50 Mbps wholesale speed tiers and a maximum ceiling price at no more than $55 in the 2024 financial year, regardless of the volume of data used. But prices would rise after the 2024 financial year.

“By eliminating CVC (cap­acity) charges from 100Mbps and above wholesale speed tiers, we are giving retailers greater price certainty and providing a pathway for more customers to enjoy the many benefits of our highest speed tiers,” chief regulatory affairs officer Jane van Beelen said on Wednesday.

“And by reducing CVC charges and committing to adjust data inclusions over the next three years, we are providing high-value products that will smoothly transition to flat rate wholesale pricing on our 12, 25 and 50 Mbps speed tiers.

“Our proposed amended SAU variation puts the responsibility and investment risk on NBN Co to meet the expected growth in data demand over the next two decades, while earning the minimum revenues required to invest in the network.”

The SAU is likely to provoke discussion among retailers.

NBN Co in July last year backed down from initial changes that would have locked in price rises until 2040 and doubled the price of entry-tier plans, after then-new Communications Minister Michelle Rowland intervened and called for a “reset”.

NBN Co CEO Stephen Rue told The Australian this week he was confident the latest proposals would be accepted by both retailers and the regulator. If accepted, the SAU changes could be live before the end of the year.

“We looked at the feedback we got from the ACCC on our previous proposal and we have sought to address all of those issues,” Mr Rue said in an interview this week. “As a result we believe we are lodging something that is capable of acceptance.”

Communications minister Michelle Rowland welcomed the latest proposals in a statement on Wednesday.

“The Albanese government appreciates the constructive engagement of all parties to settle a variation to the SAU that places the long-term interests of Australian consumers at its core,” Ms Rowland said.

“This means affordable prices for consumers and small businesses, and a quality, resilient network underpinned by strong financials.

“Amendments to the SAU submitted this week will help give certainty to NBN Co, consumers and industry.

“The NBN supports much of Australia’s economy and many families and it is important we get the policy settings right.”

Originally published as NBN Co lobs revised pricing options for ACCC’s approval