Response to ACCC expenditure review

The CIE was commissioned by NBN Co to respond to the ACCC’s review of its proposed expenditure for the 2026–2029 regulatory cycle, specifically to respond to criticisms of the degree to which demand forecasts and proposed expenditure take account of consumer willingness to pay (WTP). Our report argues that in NBN’s unique circumstances, in which there is some degree of competition for NBN customers and no direct link between costs and prices in the medium term, an incremental revenue test is reasonable and sufficient justification of proposed expenditure. NBN conducts incremental revenue tests and considers WTP as part of the demand forecasts that underpin incremental revenue. We identify examples of NBN's use of revealed preferences from observed demand for existing services to inform these demand forecasts. We also identify errors in the analysis that informed the ACCC's draft decisions in relation to NBN's proposed fixed wireless and fibre upgrade programs.

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