ACCC seeks NBN Co's capital forecasts

The Australian Competition and Consumer Commission has asked NBN Co to hand over confidential costs and pricing forecast information.
Written by Josh Taylor, Contributor

The Australian Competition and Consumer Commission (ACCC) has asked NBN Co for confidential financial information that will be used to determine how the company expects to recover the costs for rolling out the National Broadband Network (NBN) over the next 30 years.

In a letter posted on the ACCC's website today (PDF), Richard Home, the commission's general manager of NBN engagement requested access to NBN Co's forecast capital expenditure, forecast values of construction in progress, forecast operating expenditure, and forecast value of asset disposal for every year that the 30-year special access undertaking (SAU) covers.

The SAU sets out the pricing and regulatory framework for the operation of the NBN for the next 30 years, and is designed to work hand-in-hand with the wholesale-broadband agreement (WBA), which sets out arrangements between NBN Co and access seekers selling broadband services on the network over a shorter period of time--at this point, one year.

The ACCC also wants forecast demand for each NBN product, the prices for each product over the 30 years, and total revenue expected to be earned from new products on the NBN that are not part of the existing range of products.

"This information will be used to model the implications of a range of cost, demand, pricing, and revenue scenarios for the long-term revenue constraint methodology in the SAU over the SAU term," Home said. "This will provide the ACCC with a more informed view on the expected length of the initial cost recovery period, and likely incentives generated by the SAU price controls."

The price controls in the SAU have come under criticism from Telstra, Optus, Macquarie Telecom, and AAPT, which have said that discretion over the capacity charge built into NBN Co's pricing model could lead to larger price rises on the NBN than the company has said due to increased data usage on the network.

The ACCC has asked NBN Co to submit the documents to the ACCC by February 12, and if this information has not been handed over, the ACCC has the power to formally request the information.

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