Government moves to implement NBN subsidy

The government has introduced legislation to implement the so-called ‘NBN tax’: A levy on superfast broadband services that will help subsidise services on the National Broadband Network that would not otherwise be commercially viable.

Urban infrastructure minister Paul Fletcher today introduced the Telecommunications (Regional Broadband Scheme) Charge Bill 2017 and the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2017 in the House of Representatives.

The Regional Broadband Scheme (RBS) levy imposes a monthly, per-premise charge on carriers that offer superfast broadband services.

The charge has two components: A base charge of $7.09 per service, subject to indexation, and an administrative charge.

“The money collected from the base component of the charge would be used to fund the losses NBN Co incurs in constructing and operating its fixed wireless and satellite networks, replacing the company's opaque internal cross-subsidy from its fixed-line networks,” Fletcher said.

The money from the administrative component helps fund associated enforcement activities conducted by the Australian Communications and Media Authority and the Australian Competition and Consumer Commission (ACCC).

The proposed legislation allows the minister to adjust the amount of the two components of the RBS.

“This will ensure the monthly charge amount reflects the size of the fixed line broadband market and the net losses incurred by NBN Co in respect of its fixed wireless and satellite networks,” Fletcher said.

“The bill would require the Australian Competition and Consumer Commission to give advice to the minister in relation to resetting the base and administrative cost components at least once every five years. The minister must have regard to this advice when deciding whether to adjust the charge amount.

The ACCC said in May that network operators will be allowed to pass the RBS charge on to consumers.

The Telecommunications Legislation Amendment (Competition and Consumer) Bill also outlines functional separation obligations for operators of superfast broadband networks that provide services to residential users. Operators of such networks are required to have functionally separate retail and wholesale arms.

“[C]arriers other than NBN Co and Telstra will be able to operate both network and retail businesses on a functionally separated (that is, at arm’s length) basis subject to the approval of the Australian Competition and Consumer Commission, the ACCC,” Fletcher said.

“Networks operating on a functionally separated basis will need to meet core requirements. These include the operation of separate wholesale and retail business units, with separate workers, accounts and IT systems, as well as the non-discriminatory provision of services and the protection of customer information.

“This approach will enable carriers to harness the efficiency benefits of integrated operations while allowing other providers to share those benefits through non-discriminatory access to networks.

The bill also removes the rules from networks specifically servicing small businesses. “This creates greater flexibility for carriers to supply superfast broadband to small businesses, enabling small business to benefit from greater competition in this market,” Fletcher said.

The other element of the bill is legislating ‘Statutory Infrastructure Provider' (SIP) obligations.

The bill will oblige NBN to connect premises to the National Broadband Network and supply a wholesale broadband service with least 25/5Mbps and voice calling capabilities (though the voice calling requirement is not a requirement on satellite services).

“The current statement of expectations issued to NBN Co requires it to roll out the National Broadband Network. However, there is no statutory obligation requiring NBN Co to connect any premises to its network and service them on an ongoing basis,” Fletcher said.

“This bill addresses this 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.

Copyright © 2017 IDG Communications, Inc.

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