Satellite operators get spectrum license tax cuts

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Satellite operators get spectrum license tax cuts

But not as deep as NBN Co and Comms Alliance sought.

Satellite operators will pay less tax on the annual spectrum licenses needed for their services, but the cuts aren’t as deep for high-density areas as NBN Co and Communications Alliance had wanted.

The Australian Communications and Media Alliance (ACMA) today put forward plans to bring the spectrum taxes it charges more in line with other international jurisdictions from April 5 this year.

That will mean a 30 percent reduction for Australia-wide and high-density area licenses, 50 percent reductions for medium- and low-density area licenses, and “100 percent tax reductions for remote-density area licenses”.

The move was welcomed by industry, including by the Communications Alliance’s satellite services working group chair John Stanton.

“Although a long time coming, [this] is a welcome recognition that industry and regulators can work together to achieve rational and nationally beneficial economic outcomes,” Stanton said in a statement.

However, the tax cuts for Australia-wide and high-density area licenses aren’t nearly as deep as some in the industry had sought.

NBN Co – whose Sky Muster is classed as a high-density fixed satellite service – had “urged the ACMA to consider reductions… in the region of 50 to 60 percent” for the licenses it uses, compared to the 30 percent cuts that were proposed and ultimately approved.

The Communications Alliance had also backed “greater discounts” for these license types, citing a third-party analysis commissioned by the ACMA as evidence that such tax cuts were warranted.

However, the ACMA ultimately disagreed, in part over concerns that those areas could become congested at a time when uses for parts of the Ka spectrum band are still being determined.

“Parts of this spectrum range are being considered for 5G services by the International Telecommunication Union (ITU), and so the ACMA believes that more moderate tax reductions are prudent at this time as it assesses any relationships between 5G spectrum demand and satellite services in the Ka band,” the regulator said.

By contrast, spectrum licenses in medium, low and remote density areas were considered “under-utilised”, supporting larger tax cuts to coax operators to make use of them.

The ACMA also approved a 30 percent tax incentive for earth station spectrum sharing.

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