The Australian Competition and Consumer Commission says its draft rejection decision was made because it is “not at this time satisfied that the November proposed variation would result in access terms that promote the long-term interests of consumers over the duration of the variation, due to limitations in the processes under which those terms of access are periodically reset”.

“Further, the ACCC considers the proposal would require revenue allowances from 1 July 2032 that would not create incentives for a regulated entity to act efficiently.

“The ACCC also considers that NBN Co’s proposed access terms for the first three years following acceptance of the variation would pose risks to efficiency and competition. This is because the cost of services supplied using the standard wholesale offer would fall over a very wide range, and the variation would not commit NBN Co to providing suitable measures to assist retailers with this residual cost uncertainty.”

The Commission says it has made its decision after being informed by “constructive and extensive engagement”with NBN Co, Retail Service Providers, consumer representatives and other stakeholders.

“The ACCC can only decide to accept or reject NBN Co’s variation proposal, and our draft decision today is to reject this proposal. However, in making our decision, we have identified a number of aspects of it that reflect issues raised in the ongoing industry consultation process and which represent a significant improvement on the current SAU and earlier variation proposals,” ACCC Commissioner Anna Brakey said.

“We have also outlined some specific issues NBN Co could address to accelerate the pathway to an acceptable variation.”

Alongside its draft decision, the ACCC notes that it has published a letter received in March from NBN Co in which NBN Co outlines a number of changes it would be willing to make in a further variation proposal in response to concerns raised with the November proposal.

The ACCC says it welcomes NBN Co’s preparedness to make changes that could result in a revised SAU variation that is capable of acceptance, and noting that the SAU is a key part of the economic regulation of the NBN, whichsets the rules for broadband providers to access the NBN over the coming decades, which can include minimum service standards and wholesale price controls.

The Commission notes that a commitment to consult with retailers and consumer advocates over planned service improvements “would also assist NBN Co in more effectively resolving issues that drive poor consumer sentiment, including through reprioritising its investment and work programs”.

“The ACCC is now seeking stakeholder submissions on its draft decision, as well as industry views on the further changes NBN Co has proposed in its March letter.

“Should NBN Co withdraw its current variation proposal and resubmit a revised one, the ACCC would then publish and call for submissions on this new proposal.”

“Australia needs an efficient, reliable and affordable national broadband network to be a world-leading digital economy. We are acutely aware that the process to vary the current NBN Special Access Undertaking has been running for two years and we appreciate the open and ongoing engagement by the sector through that time. This is critical, national infrastructure and to accept a variation we must be satisfied it promotes the long term interests of Australians,” Commissioner Brakey said.

The ACCC’s draft decision and the NBN Co letter are available at: NBN Co SAU variation (November 2022) Draft Decision