The Government Wants You To Pay An NBN Tax

The government is pushing for a $7.10 levy to be implemented on the ISPs that deliver Australia’s superfast fixed-line broadband, to help pay for the wireless and satellite portions of the National Broadband Network. That

Although the levy will be charged to the retail service providers — the ones already unhappy with the cost and design restrictions of the NBN — those RSPs are likely to pass it on to customers directly. That $7.10 represents a third of the profit some companies make off each customer, according to some reports.

iTnews reports the $7.10 minimum tax will be legislated as part of a package of telco law changes during parliament’s winter sitting, sooner rather than later. After today’s federal Budget, there are 17 more sitting days before the end of the parliamentary period for the regional broadband scheme charge bill to pass.

It will likely be implemented by July 1 as the government initially intended, if the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2017 passes parliament during the sitting. As well as applying to fixed-line NBN, which will pay for 95 per cent of the Regional Broadband Scheme, competitors to the NBN like TPG’s fibre-to-the-basement network will also have to shoulder the burden.

With the NBN already subsidising the cost of building and expanding the non-commercial fixed wireless and satellite portions of the network through its design and initial funding, this bill will shift the cost from the government-run organisation to the RSPs.

Consultation with industry on the bill was held from December until February through an exposure draft, and a submission from ACCAN says that the consumer advocacy group believes levying fixed line connections alone is inequitable. The detail of the reforms are still being finalised by government.

If the cost of funding these services is only borne by customers on certain networks, then these customers are disadvantaged by paying higher prices than they would if they were served by a network that does not have to contribute. This could create a financial difference in the cost of services and disadvantage those who are unable to move or choose the un-levied network. Therefore the costs should not be borne by one network alone.

The ‘NBN tax’ will likely rise after it is implemented, too, with Communications Minister Mitch Fifield saying it could hit $8 by 2022 in December of last year. The government says that while NBN connections are more expensive, prices could fall over time as the network reaches completion. iTnews says that with 80 per cent of the NBN rollout so far being in regional and rural areas, it’s unlikely that many fixed-line customers are already contributing.

NBN connections generally sit at price parity or a slightly higher monthly cost than current ADSL and cable wired internet connections in Australia, although the slowest 12Mbps plans can be as cheap as ADSL. [iTnews]