Optus blasts 'opportunistic' corporate internet tax

Optus has branded plans to tax corporate internet services “opportunistic”, and warned NBN Co to compete “on its merits” if it makes a play for the enterprise market.

The telco questioned what benefit NBN Co’s entry into an already-crowded enterprise market would offer and why it would need to be protected from competing networks that existed long before the NBN.

NBN Co yesterday said the proposed broadband tax would all but collapse if business services were granted an exemption, ensuring an imminent showdown between NBN Co, the government, and the telecommunications industry over the issue.

Applying the broadband tax to business services would mean a hike of $7.10 per line per month for users of NBN-comparable services operated by companies like TPG.

“It is unclear whether there are any benefits to end-users from NBN Co entering into enterprise markets when such markets are served by multiple high speed fibre broadband FTTP networks,” Optus told a senate committee examining a bundle of laws that includes the broadband tax.

“For example, businesses in business parks typically have a choice of existing services from the major business FTTP networks such as Telstra, Optus, Macquarie, Vocus, NextGen and other TPG group companies.

“Allowing NBN Co to deploy a network in competition with existing fibre networks is unlikely to provide any end-user benefit nor provide any additional competition.”

It argued that if NBN Co chose to "move away from its original natural monopoly mandate" in the pursuit of extra revenue, it should "compete on its merit.”

Optus said applying the broadband tax – formally known as the regional broadband scheme or RBS – to corporate and enterprise services overstepped its purpose.

The telco said it had no problem taxing “protected services”, where third parties had built networks with an express desire to undermine NBN Co.

But it objected to the idea of protecting “future revenue from services in contestable markets”.

“[This] is an opportunistic attempt to transfer revenue from competitive corporate markets to NBN Co,” Optus said.

“We are aware that NBN Co may have future plans to deploy services in this area; however, in doing so it will be entering an existing competitive market and competing with existing commercial services.

“The original NBN legislation never extended to these services. There are no cease sale or separation obligations for these services because there was no evidence of market failure that necessitated NBN displacing these existing networks.”

Optus joins Telstra and Vocus in opposing the plans to tax business and enterprise services, protecting a future entry into the market by NBN Co.

The government-backed network builder is hoping to take 15-20 percent of its total revenues from the business market by 2020.