ACCC Draft Decision on the Special Access Undertaking lodged by NBN Co on 18 December 2012 April 2013 Australian Competition and Consumer Commission 23 Marcus Clarke Street, Canberra, Australian Capital Territory, 2601 First published by the ACCC 2013 10 9 8 7 6 5 4 3 2 1 © Commonwealth of Australia 2013 This work is copyright. In addition to any use permitted under the Copyright Act 1968, all material contained within this work is provided under a Creative Commons Attribution 3.0 Australia license, with the exception of the Commonwealth Coat of Arms and the ACCC logos. The details of the relevant license conditions are available on the Creative Commons website, as is the full legal code for the CC BY 3.0 AU license. Requests and inquiries concerning reproduction and rights should be addressed to the Director Publishing, ACCC, GPO Box 3131, Canberra ACT 2601, or [email protected]. Important notice The information in this publication is for general guidance only. It does not constitute legal or other professional advice, and should not be relied on as a statement of the law in any jurisdiction. Because it is intended only as a general guide, it may contain generalisations. You should obtain professional advice if you have any specific concern. The ACCC has made every reasonable effort to provide current and accurate information, but it does not make any guarantees regarding the accuracy, currency or completeness of that information. Parties who wish to re-publish or otherwise use the information in this publication must check this information for currency and accuracy with the ACCC prior to publication. This should be done prior to each publication edition, as ACCC guidance and relevant transitional legislation frequently change. Such queries should be addressed to the Director Publishing, ACCC, GPO Box 3131, Canberra ACT 2601, or [email protected]. www.accc.gov.au Contents Contents...................................................................................................................................... iii Glossary ....................................................................................................................................... 1 Preface ......................................................................................................................................... 5 Consultation on the SAU to date ............................................................................................. 6 Next steps in the assessment process .................................................................................... 8 Executive Summary .................................................................................................................... 9 1. Background ......................................................................................................................... 17 1.1. Overview of the Special Access Undertaking ............................................................. 17 1.2. What is a Special Access Undertaking?...................................................................... 20 1.3. Criteria for assessing the Special Access Undertaking ............................................... 23 1.4. Structure of the Draft Decision .................................................................................... 30 2. Interaction between the SAU and the telecommunications access regime ................. 31 2.1. Overview of issues and ACCC approach to assessment ............................................ 32 2.2. Assessment of conduct concerning elements of the telecommunications access regime .................................................................................................................................... 38 2.3. Assessment of conduct concerning changes to the SAU over time ........................... 54 2.4. Assessment of SAU extension mechanisms ............................................................... 61 3. Services to which the SAU relates ................................................................................... 64 3.1. NBN Access Service ................................................................................................... 64 3.2. Ancillary Services ........................................................................................................ 65 3.3. Facilities Access Service ............................................................................................. 66 3.4. Submissions ................................................................................................................ 66 3.5. Preliminary ACCC views ............................................................................................. 68 4. Product development and withdrawal.............................................................................. 76 4.1. Product development and variation ............................................................................. 77 4.2. Product withdrawal ...................................................................................................... 87 5. Price-related matters .......................................................................................................... 95 5.1. Overview ...................................................................................................................... 95 5.2. Views of interested parties on overall pricing approach .............................................. 97 5.3. Framework for assessment ......................................................................................... 98 5.4. Prices for individual products .................................................................................... 104 5.5. Long-term revenue constraint ................................................................................... 129 5.6. Preliminary ACCC view on price-related terms ......................................................... 170 Draft Decision about the 2012 NBN Co Special Access Undertaking — April 2013 iii 6. Non-price matters ............................................................................................................. 172 6.1. Overview .................................................................................................................... 172 6.2. Service levels ............................................................................................................ 176 6.3. Dispute management ................................................................................................ 185 6.4. Confidential information ............................................................................................. 190 6.5. Intellectual property rights ......................................................................................... 193 6.6. Risk management ...................................................................................................... 196 6.7. Clauses relating to points of interconnect ................................................................. 200 6.8. Rollout information ..................................................................................................... 205 7. Fixed Principles ................................................................................................................ 208 7.1. Scope of the fixed principle ....................................................................................... 209 8. Summary of the Draft Decision ....................................................................................... 211 8.1. Categorisation of SAU clauses .................................................................................. 212 8.2. Terms and conditions in relation to compliance with the SAOs ................................ 214 8.3. Conduct relating to access ........................................................................................ 216 8.4. Conduct relating to ancillary activities ....................................................................... 229 Attachment A: Initial prices ............................................................................................. 233 Attachment B: Services for which the ACCC is not satisfied that the initial prices are reasonable ......................................................................................................................... 242 Contacts ................................................................................................................................... 243 Glossary Access Agreements – An agreement between a carrier (access provider) and an access seeker for the supply of declared services. The requirements for a legally valid Access Agreement are set out in section 152BE of the Competition and Consumer Act 2010 . Access Determinations – Written determinations made by the ACCC relating to terms and conditions for access to a declared service. Access seeker – A content service provider or carriage service provider that makes, or proposes to make, a request to NBN Co for access to its services, as defined in section 152AG of the Competition and Consumer Act 2010 . Ancillary Services – NBN Co defines this as the services supplied by NBN Co that facilitate the supply of, and are necessary for the access seeker to acquire, the NBN Access Service, but excludes the Facilities Access Service. Annual revenue requirements – The amount of revenue that NBN Co would be required to earn to recover its costs in a particular year. Over the SAU term, the annual revenue