“Broadband Tax” Looks Set For Australia

“Broadband Tax” Looks Set For Australia

A controversial charge impacting the customers of some non-NBN internet service providers to help prop up the National Broadband Network appears it will go ahead.

Broadband tax - Australia Image: Alexas_Fotos.

The Senate’s Environment and Communications Legislation Committee last week pretty much gave the green light to the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 and a pass to the Telecommunications (Regional Broadband Scheme) Charge Bill 2019.

Originally signaled in 2017 , the latter bill would establish a scheme to provide funding for NBN Co satellite and fixed wireless services for rural and regional areas across Australia, which are running at a significant loss. These services are currently funded by an internal cross-subsidy within NBN Co.

Under the proposed RBS, certain non-NBN carriers would be required to pay a charge for each premises on their network that has an active fixed-line superfast broadband service. The charge will be set at $7.10 per month – initially. There will be some exemptions, including networks with under 25,000 customers.

Lightning Broadband is a non-NBN service provider offering superfast broadband services via its own fibre and hybrid fibre/wireless connections, but doesn’t expect to be impacted by the “broadband tax” in its current form.

NBN users won’t have to pay the tax per se as it’s already factored into service charges. Obviously it’s not enough to stem the bleeding of cash by NBN Co., and that’s why non-NBN providers are in the Government’s crosshairs.

“The committee is of the view that overall, the bills achieve the right balance between ensuring a transparent and equitable funding model to enable NBN Co to improve the provision of superfast broadband network, particularly to regional Australia, while also encouraging commercial opportunities for network operators,” states the Committee in its report .

Death, Taxes – And The NBN

Some have questioned why non-NBN companies (and their customers) are being financially punished for developing businesses and services that work well. It’s a very curious scenario to have to pay your competition just because you have a good product and business model.

In November last year, Shadow Minister For Communications Michelle Rowland MP called it :

“a levy whose primary purpose is to reduce competition.”

The tax/charge is a significant, ongoing cost that some companies won’t be able to absorb and will be forced to pass on. With the genie let out of the bottle, there’s also the potential for further increases, or maybe even tightening of exemptions with tweaking of legislation.

Perhaps there will be three inescapable things in life here in Australia – death, taxes and fallout from the NBN.

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