Govt goes ahead with broadband tax bill

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Govt goes ahead with broadband tax bill

Reiterates assertion that NBN customers won’t pay more.

The federal government has made good on its promise to introduce broadband tax legislation before parliament wraps up for the winter.

Minister for Urban Infrastructure Paul Fletcher introduced a pair of telecommunications bills today that set NBN Co as the new default fixed-line operator in Australia, and paved the way for a broadband tax to cover future fixed wireless and satellite costs.

The broadband tax converts an “opaque” internal NBN cross-subsidy of regional and rural connections into a “transparent” monthly charge of $7.10 per premises served by FTTx and HFC technologies.

It is known more officially as the regional broadband scheme or RBS.

“Once the NBN rollout is complete it is expected that NBN Co will have around 95 percent of the fixed line market, which means it will continue funding the bulk of the cost for providing broadband to regional Australia,” Fletcher said.

“Customers on NBN Co’s networks will not experience price rises as the charge is already embedded in NBN Co’s pricing.

“For the remaining carriers it will be up to these networks to decide whether some or all of the charge is passed on.”

A ruling by the ACCC last month gave these “other” carriers – including Telstra, TPG and Vocus – permission to pass on the charge to customers.

It had earlier been expected they would simply absorb the tax into their margins, but several argued that would result in a large impost on the profitability of their services.

Some of those carriers also argued that – contrary to the government’s assertions – it is unlikely that the tax is already built into NBN Co’s own prices, though this appears to have had little bearing on the shape of the legislation brought before parliament.

It is possible that similar objections may have been raised in a consultation on the specific broadband tax bill by the Department of Communications; however, this is still listed as being “under review” and submissions remain unpublished, despite the laws seemingly being pushed ahead.

Two bills are required to be passed to bring the broadband tax into effect. One is the specific “charge” bill for the tax, while the other is a package of telecommunications-specific reforms.

That package includes new rules that would mark the changing of the guard for default fixed-line infrastructure provision in Australia.

“The current statement of expectations issued to NBN Co requires it to roll out the national broadband network,” Fletcher said.

“However, there is no statutory obligation requiring NBN Co to connect any premises to its network and service them on an ongoing basis.

“This bill addresses this issue by establishing a statutory infrastructure provider or SIP regime so that all premises in Australia can have access to superfast broadband. This will provide certainty and clarity for all parties: NBN Co, its customers, and most importantly consumers.

“Under the arrangements, NBN Co will become the SIP for areas as it rolls out its network and will be the default SIP for all of Australia once it has completed the national broadband network.

“This is appropriate given that NBN Co will ultimately replace Telstra as the principal fixed line operator in Australia.”

The government will be able to declare other carriers as SIPs “where appropriate”. It will maintain a register of SIPs, outlining who has responsibility for areas of Australia.

The SIP regime is considered an important step in the handover of responsibilities for the universal service obligation (USO).

A review of the USO by the Productivity Commission this week said the current scheme should be axed. The commission believed most Australians could achieve minimum voice and data services using a mix of NBN and mobile services.

Debate on both bills was adjourned. 

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