Superfast broadband competitors will be charged $7.09 per line a month to help subsidise the cost of regional internet

This article is more than 3 years old

This article is more than 3 years old

The Turnbull government is planning to charge competitors to the National Broadband Network a levy to help pay for rural broadband services.

The levy would ensure NBN rivals are unable to cherrypick the most profitable parts of the market, usually in the inner city, and leave NBN Co to wholly subsidise the cost of providing services to rural and remote areas, which is expected to cost about $10bn over the next 30 years.

The Coalition is calling for public feedback on the scheme, which the communications minister, Mitch Fifield, said would strengthen the provision of broadband and make the system sustainable.

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In a joint statement from Fifield and the deputy Nationals leader, Fiona Nash, the government said it expected the regional broadband scheme (RBS) to raise $40m in the first year of operation, but only 10% of that would be provided by NBN’s competitors.



In the first financial year of 2017-18 – if it passes the parliament – owners of superfast broadband networks would be charged $7.09 per line a month.

“Regional and rural users of NBN’s fixed wireless and satellite services will benefit from the RBS, which will require all eligible fixed-line superfast broadband networks to make a proportionate contribution to the long-term cost of these services,” the government’s statement said.

The government estimates non-NBN fixed-line networks provide 10% of fixed-line services.

“NBN, as the largest network, will continue to be responsible for the overwhelming majority of funding for regional and rural services and will make around 90% of RBS contributions,” the Coalition statement said.

Fifield said the draft legislation would also formalise a commitment to ensure all Australian premises could access a fast broadband connection.

The draft legislation would set up a special account which could only be used to pay for fixed wireless, satellite services, administration costs and refunds to carriers.

Labor’s communications spokeswoman, Michelle Rowland, said Labor would examine the plan but said the minister received funding options for regional services in March. She questioned why the draft legislation had not been released until Monday.

“This process, as with everything this minister touches, has been a complete bungle,” Rowland said.



In April next year the Productivity Commission is due to release its final report into the telecommunications universal service obligation, which was originally designed to ensure all Australians had access to a fixed phone line.

The draft report released last week proposed the obligation “be replaced with a universal service policy objective to provide a baseline or minimum broadband (including voice) service to all premises in Australia, having regard to its accessibility and affordability, once NBN infrastructure is fully rolled out”.

Reg Coutts, emeritus professor of telecommunications at Adelaide University, said the unexpected release of the RBS policy separate to the consideration of the universal service obligation was “bizarre”.

Coutts was a member of the NBN expert panel which evaluated the first round of bids for Australia’s broadband network.

“Releasing this prior to finalisation of the Productivity Commission report on USO is bizarre – it is totally disconnected to other policy, a case of the right hand not knowing what the left one is doing,” Coutts said.

“Why is the government coming out with this method of subsidising and not linking in with the consideration of USO?”

He said the change in technology creating the integration of fixed lines, mobiles and broadband was obvious to both consumers and industry.

“So the government is running behind what industry knows and what the consumer knows.”



A spokeswoman for the communications minister said in its draft USO report last week, the Productivity Commission supported the enactment of a statutory infrastructure provider (SIP) regime for the provision of high speed data like the one proposed.

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She said the introduction of a SIP regime would guarantee that all people in Australia, no matter where they live, would have access to high-speed broadband. Under the government’s plans, the NBN will be the default SIP for all of Australia.



“The SIP regime will provide certainty for the rollout of high-speed broadband infrastructure and the provision of wholesale services and envisages retail services being widely available as a result of competition at the retail layer,” the spokeswoman said.

“How the USO may interact with that underlying regime will depend on the Productivity Commission’s final report and the government’s response to it.”

Consultation on the draft legislation is open until 3 February.

