Wholesale prices for internet services under the national broadband network will be limited to a maximum rise of half the increase of inflation, according to NBN Co's proposal to the competition watchdog.
NBN Co, the builder of the government's $35.9 billion high-speed broadband network, lodged its special access undertaking (SAU) with the Australian Competition and Consumer Commission (ACCC) on Monday.
The SAU, or the rules of the game, would set out the terms of access over the 30 years of NBN Co's corporate plan, which was released in late 2010.
It provides the commitments to how NBN Co would price its services over the long term, any non-price conditions of supply, and ensure the government enterprise would recover no more than its incurred costs to build the network.
The undertaking would work with NBN Co's wholesale broadband agreement (WBA) released on November 30.
The SAU would provide the framework for price and non-price terms until 2040, while the WBA sets out the commercial arrangements between NBN Co and retail service providers over shorter periods.
Under the SAU, the ACCC would be given powers and functions to reach agreement between NBN Co and retail service providers on non-price terms or the introduction of new prices.
A decision by the ACCC would ensure NBN Co made the outcome available to all its customers via changes to the WBA.
Other features of the SAU include a cap on price rises for any NBN Co product or service to half of the increase in the consumer price index (CPI) in any one year, which could not be accumulated if not used.
Prices of basic products would be frozen until June 2017, all services and products offered by NBN Co would be covered over all networks, and a commitment that all prices would fall in real terms.
Also, NBN Co would recover its prudently incurred costs, at a regulatory rate of return on its assets of 3.5 percentage points above government bond rates.
A government 10-year bond traded around 4 per cent on Monday.
NBN Co said the ACCC would begin a formal process on the SAU so the competition watchdog could assess the company's proposal.
This would involve consultation by the ACCC with companies in the telecommunications sector about the terms of the SAU.
A spokesman for Communications Minister Stephen Conroy said the NBN Co's lodgment of its SAU with the ACCC was the next stage in rolling out the broadband network.
"The ACCC, in consultation with industry, will now consider NBN Co's undertaking," the spokesman told AAP.
"The government encourages industry to actively engage in the ACCC process."
The competition watchdog said on December 2 it would continue to have discussions with Telstra over the telco's revised structural separation undertaking as part of its agreement with NBN Co and the government.
Telstra's deadline for a regulatory decision on the transfer of its fixed-line monopoly to the NBN was December 20.
It is yet to comment on NBN Co's undertaking.
Australia's second largest telecommunications company Optus said it was still assessing NBN Co's SAU.
NBN Co was created to build high-speed broadband to 93 per cent of homes, businesses, schools and hospitals around Australia.
The remaining seven per cent will be serviced by fixed-wireless and satellite technology.
The network build is scheduled to be finished by 2021.
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