ACCC seeks more control on NBN prices

The Australian Consumer and Competition Commission has demanded greater regulatory oversight over the NBN Co under its "special access undertaking", asking the infrastructure monopoly to provide more assurance over the price it charges retail providers.

The competition watchdog is broadly satisfied with the undertaking, which sets out for 30 years the commercial and legal conditions under which telcos access the national broadband network.

"We got an undertaking that we can work with," ACCC chairman Rod Sims said, "but we are making important changes we think need to be made."

Under NBN Co's undertaking, prices will stay the same until 2017 and future increases must be below inflation.

"Consumers will pay what they pay now for their internet services and prices should go down in real terms over time," Mr Sims said.

But the ACCC is concerned that NBN Co can withdraw and then reintroduce a similar product at whatever price it chooses. This would undermine the ACCC's price cap.

Mr Sims said he wanted to make sure the ACCC "has the ability to have a say about whether they should be able to withdraw a product, whether they should introduce a new product and in particular at what price level".

The competition watchdog also wants to make sure it has the power to "rebalance price".

Consumers normally pay both a "fixed access charge" - a one-off connection fee - and a "usage charge".

The NBN's use charge is designed to decline over time as more people join the network.

Mr Sims said he wanted the power to reset prices, such as raising the fixed access charge but lowering usage charge, if NBN's use charge did not decline fast enough.

"We want to know that there is no disincentive for people to make full use of fast broadband."

After lobbying from telcos, the ACCC also removed non-price terms, such as how long it would take for NBN Co to connect new customers.

NBN Co welcomed the ACCC draft decision and the company's head of regulatory affairs and industry analysis, Caroline Lovell, said: "The draft decision indicates the ACCC is minded to accept fundamental elements of the special access undertaking."