Special Access Undertaking (SAU)
NBN Co's Special Access Undertaking (SAU) was accepted by the ACCC on 13 December 2013. The SAU is a key part of the regulatory framework that governs the prices NBN Co - as a wholesale open access telecommunications network, can charge for the services it supplies to retail phone and internet companies, as well as other terms.
The ACCC’s decision to accept the SAU followed an extensive consultation process between the ACCC, NBN Co and the industry stakeholders.
Having an accepted SAU in place establishes a baseline from which future regulatory decisions can be made, and from which NBN Co and its customers can make commercial arrangements.
While the SAU was developed in the context of previous government policy, NBN Co considers – and the ACCC acknowledges – that the SAU should be flexible enough to be varied to respond to future technology changes that may be required.
The accepted SAU was submitted by NBN Co on 19 November 2013 and is based on a variation to the SAU submitted by NBN Co in December 2012.
The SAU works in conjunction with the Wholesale Broadband Agreement (WBA). The SAU will shape price and non-price terms until 2040, while the WBA is a commercial contract between NBN Co and its customers, and currently has a standard term of two years.
NBN Co's objectives in developing the SAU include:
- Giving NBN Co's customers and end users certainty about the terms of access to NBN Co's services, including an appropriate regulatory oversight role for the ACCC; and
- Providing the framework necessary for long-term cost recovery.
The scope of the SAU is defined with respect to the access service, and covers all wholesale Layer 2 services currently provided over NBN Co's Fixed Line, Fixed Wireless and Sky Muster™ satellite networks.
The SAU makes commitments about NBN Co's wholesale pricing over the long term. This includes the process for product development and withdrawal, a limited set of non-price terms, and the conditions of supply. This ensures that NBN Co will recover no more than its prudently incurred costs – inclusive of an appropriate rate of return on capital.
The SAU is designed with a modular structure, with more detailed terms applying for the first ten years (the Initial Regulatory Period during which the NBN is expected to be rolled-out in accordance with the Network Design Rules and SAU), and a set of higher level principles to apply for the remainder of the SAU term (the Subsequent Regulatory Period). During this regulatory period, the SAU requires NBN Co to lodge Replacement Module Applications every three to five years. A key part of each such application will be the financial forecasts for the upcoming regulatory period.
Under the SAU, the ACCC retains reserve powers in regards to; the pricing of new products (where not set out in the SAU); the rebalancing across all prices (subject to expected net revenue neutrality on a net present value basis over the period – until 30 June 2040); the determination of NBN Co’s regulatory cost base and the roll-forward of initial losses; and product withdrawals.