196Wash-up mechanism for maximum revenues specified in initial price-quality paths

1. This section applies when the Commission specifies, in the price-quality paths for each regulatory period that starts before the reset date (except the first regulatory period), the maximum revenues that may be recovered by a regulated fibre service.

2. The Commission must, in calculating the maximum revenues, apply a wash-up mechanism that provides for any over-recovery or under-recovery of revenue by the regulated fibre service provider during the previous regulatory period to be applied in a manner that is equivalent in present value terms (as calculated in the manner that the Commission thinks fit) over 1 or more future regulatory periods.

3. To avoid doubt, the Commission may, but is not required to, apply the wash-up mechanism referred to in subsection (2) in a price-quality path for a regulatory period that starts on or after the reset date.