ACCC issues final determination on NBN Co's LTRCM

The Australian Competition and Consumer Commission (ACCC) has issued its final determination on NBN Co's long term revenue constraint methodology (LTRCM) for the 2013-14 financial year.

The ACCC has accepted NBN Co's LTRCM proposal after considering submissions made by Optus and NBN Co in response to the ACCC's draft determination.

It set out the values and calculations used to determine the amount of revenue NBN Co is allowed to earn each financial year, to recover the costs of providing services.

ACCC Commissioner, Cristina Cifuentes, said the consumer watchdog was satisfied that the NBN Co proposal met the expenditure criteria set out in the Special Access Undertaking.

NBN Co's Special Access Undertaking (SAU) establishes part of the regulatory framework for the National Broadband Network. NBN Co is required to submit certain information to the ACCC under the SAU, including its LTRCM proposal.

Where NBN Co is unable to recover the allowed revenue in a particular year, any shortfall is put into NBN Co's cost recovery account. NBN Co will have the opportunity to recover its accumulated losses over time as the take-up of NBN services increases.

The values required for the LTRCM proposal include NBN Co's actual capital and operating expenditures, the net value of NBN Co's regulated assets, and NBN Co's accumulated losses.

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This is the first time that the ACCC and NBN Co have undertaken this process. This LTRCM determination covers the period from April 2009 until 30 June 2014.

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Chris Player

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