The Australian Competition and Consumer Commission (ACCC) has issued a draft determination on NBN Co’s 2014-15 revenue controls, while setting out its view that NBN Co’s prices did not exceed maximum regulated prices during the year.In accordance with the long-term revenue constraint methodology set out in NBN Co’s special access undertaking (SAU) the ACCC is required to make annual determinations on NBN Co’s revenue controls.
The SAU establishes part of the NBN regulatory framework, including provisions to encourage NBN Co 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,” ACCC commissioner Cristina Cifuentes explained.
“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 Co is unable to recover the allowed revenue in a particular year, any shortfall is put into its cost recovery account, the ACCC advised, with NBN Co to have the opportunity to recover its accumulated losses over time as the take-up of NBN services increases.
The ACCC is proposing to accept NBN Co’s actual capital and operating expenditure for the year, while also deciding to accept the proposed values for regulated assets and accumulated losses.
The SAU also includes a cap on the prices that NBN Co is allowed to charge for its services, with Cifuentes stating the ACCC is satisfied prices “did not exceed the applicable maximum regulated prices in 2014-15”.
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