ACCC Says NBN Prices Are Fine, Puts A Cap On Them

“The ACCC is satisfied that NBN Co’s prices did not exceed the applicable maximum regulated prices in 2014-15,” said ACCC Commissioner Cristina Cifuentes in a statement today.

It was revealed, however, that the ACCC will be making yearly assessments of NBN’s revenue — and will put a cap on the prices that NBN is allowed to charge.

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This arrangement is set out in NBN’s special access undertaking (the SAU). The SAU establishes part of the regulatory framework for the NBN, and includes “important provisions to encourage NBN to incur expenditure efficiently.”

“The revenue control provisions in the SAU set out the method for determining the amount of revenue NBN Co is allowed to earn each financial year to recover its costs of providing services,” Cifuentes stated.

“Having assessed NBN Co’s proposal against the methodology in the SAU, the ACCC has made the draft decision to accept the values proposed by NBN Co for determining allowable revenues for 2014-15.”

Where NBN is unable to recover the allowed revenue in a particular year, any shortfall is put into NBN’s cost recovery account. NBN will have the opportunity to recover its accumulated losses over time as the take-up of NBN services increases.

[ACCC]