NBN Co's 30-year pricing plan unacceptable: operators

Staff writer
05 Apr 2012

Australian operators have blasted NBN Co’s proposed long-term pricing plan as a danger to the economy and consumers, and urged the country’s competition watchdog agency to take a stronger role in policing NBN pricing.

NBN Co submitted its revised special access undertaking (SAU) to the Australian Competition and Consumer Commission in December last year, under which it outlined a 30-year regulatory framework for setting price and non-price terms and recovering rollout costs, subject to ACCC regulation.

According to ZDnet, however, operator Optus told the ACCC that the SAU gives NBN Co too much leeway in crafting wholesale broadband agreements with telcos who want to access the network, and that safeguards proposed in the SAU – such as freezing wholesale prices for five years and limiting price increases for the next 25 years to half the annual consumer price index – were insufficient.

In a submission to the ACCC, Optus said that the watchdog should have the power to approve all pricing outlined in the agreements up front "following detailed scrutiny of all the forecast cost inputs", and that those prices should be locked in based on NBN Co's long-term forecasts of its "efficient costs and revenues", ZDnet reports.

Otherwise, Optus said, NBN Co would be allowed to operate on an “inefficient cost-plus basis”, which would result in costs being passed on to end users “to the ultimate detriment of the Australian economy as a whole.”

Optus said it was “critical that ACCC oversight of NBN is at least as rigorous as equivalent regulatory oversight of other forms of monopoly publicly-owned infrastructure.”

Other operators, such as AAPT, iiNet, Internode and Macquarie, made similar demands in their own submissions to the ACCC, according to reports.

"No one in the industry thinks this is acceptable and the SAU in its current form just reflects the failure of NBN Co to engage with the industry and understand these issues and therefore the role of proper regulation of what is essentially a monopoly," one senior telecom executive told The Australian.

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