Monday, 12 December 2016 21:05

Government proposes broadband levy on telcos to help fund regional NBN rollout Featured

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The federal government has proposed legislation to establish a Regional Broadband Scheme and the introduction of an industry levy to fund the costs of paying for the provision of the National Broadband Network in unprofitable regional areas.

The proposed RBS is estimated to raise around $40 million by imposing a levy on “superfast” (or “NBN-comparable”)   fixed-line broadband services which can offer speeds of 25 megabits per second or more.

Non-NBN fixed-line networks are currently estimated to provide 10% of fixed-line services in operation.

The government says the 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, with 10% from the industry.

The RBS levy on “superfast” fixed-line broadband services, as outlined in the draft legislation, would start with a base charge of $7.09 per service per month in the first year, 2017-2018.

The charges will be indexed to the Consumer Price Index and, in addition to the base charge, there will be an administrative fee, which will begin at $0.01266 per line per month.

The legislation says the levy won’t apply to exchange-based DSL services, satellite broadband, fixed wireless or mobile broadband services.

The government says the proposed levy would “sustainably fund” the long-term costs of regional and remote Australia’s NBN satellite and fixed wireless networks and the reforms will provide a “strong structural framework for superfast broadband” including:

•    Improving the competitive framework that superfast broadband infrastructure providers operate within; and

•    Formalising the government’s commitment to ensuring all Australian premises can access a superfast broadband connection through the Statutory Infrastructure Provider regime.

The government says the reforms will improve commercial opportunities and bolster competition, and “protect the interests of consumers by preventing anti-competitive behaviour” and put downward pressure on broadband prices”.

The announcement on Monday of the proposed reforms followed the Productivity Commission’s report last week calling for the telecommunications industry Universal Service Obligation (USO) to be scrapped, and labelling the long-term agreement that sees Telstra receiving $300 million a year to provide landlines to everyone as "difficult to justify".

In its response to the Commission’s report, Telstra said that it is, in fact, the "largest contributor" to USO funding, with an annual contribution of around $140 million.

In calling for its scrapping, the Productivity Commission said that in a digital age, the voice-based telecommunications USO is "anachronistic and needs to change".

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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