The Australian Competition and Consumer Commission (ACCC) has issued a draft determination on nbn’s revenue controls for the 2014−2015 period, with the ACCC determining that nbn’s prices did not exceed maximum regulated prices.
The ACCC is required to make annual determinations on nbn’s revenue controls in accordance with the Long Term Revenue Constraint Methodology (the LTRCM), which is set out in nbn’s special access undertaking (the SAU).
The SAU establishes part of the regulatory framework for the National Broadband Network (NBN) and includes important provisions to encourage nbn to incur expenditure efficiently.
ACCC Commissioner, Cristina Cifuentes, said, “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.
“Having assessed nbn’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.
In making the draft determination on, the ACCC is proposing to accept nbn’s actual capital and operating expenditure for the year.
The ACCC has also decided to accept the proposed values for regulated assets and accumulated losses.
In addition to the revenue control provisions, the SAU includes a cap on the prices that nbn is allowed to charge for its services.
“The ACCC is satisfied that nbn’s prices did not exceed the applicable maximum regulated prices in 2014−15,” Ms Cifuentes said.
In its proposal, nbn has also requested a minor amendment to the ACCC’s 2013−14 determination to correct for an error in its submission.
The ACCC will consider nbn’s proposed amendment in the same process as the draft determination.