Government has another crack at subsidy for regional NBN services

Reintroduces legislation to establish Regional Broadband Scheme subsidy

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Martyn Williams/IDGNS

Communications minister Paul Fletcher has reintroduced (slightly tweaked) legislation to implement the Regional Broadband Scheme (RBS): A charge levied on non-NBN-provided so-called ‘superfast’ broadband services.

The RBS is intended to help pay for the cost incurred by NBN Co to deliver ‘non-commercial’ services, such as fixed wireless and satellite-based Sky Muster connections.

Legislating the RBS has been on the government’s agenda since late 2016. The RBS would help defray the $9.8 billion it would cost to operate satellite and fixed wireless services over three decades, the government said when it initally introduced an enabling bill for the scheme.

Legislation to implement the RBS and a number of associated rules was passed by the House of Representatives but lapsed before being passed by the Senate after parliament was dissolved ahead of this year’s federal election.

“The government is bringing them back largely as previously introduced,” Fletcher said today, although the minister said there had been “some amendments that are operational improvements.”

“There are also some amendments to the original broadband scheme to adopt amendments moved by the opposition when the bills were previously before the parliament,” Fletcher said.

The RBS will initially involve a $7.09 monthly base fee as well as a $0.01 administrative fee being levied on each broadband service capable of 25Mbps+ download speeds. Because the cost is being used to subsidise NBN services, it’s not expected to have an impact on NBN prices for end users.

The charge is subject to an Australian Competition and Consumer Commission review at least every five years, with the ACCC tasked with assessing whether the RBS is meeting the costs of the fixed wireless and Sky Muster services.

Fletcher introduced two pieces of proposed legislation today: The Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 and the Telecommunications (Regional Broadband Scheme) Charge Bill 2019.

In addition to its role in implementing the RBS, the first bill also addresses carrier separation rules for operators of ‘superfast’ networks. “Generally, apart from limited exceptions, it is intended that future superfast residential networks would either be subject to a class exemption granted by the ACCC, operate on a functionally separated basis approved by the ACCC, or operate on a wholesale-only basis,” the bill’s explanatory memorandum states. That’s a shift from current rules that, in most cases, require structural separation.

A third section of the bill imposes a statutory infrastructure provider obligation on NBN Co, compelling the company to connect newly built premises to its network.

“The statutory infrastructure provider obligations will place an explicit requirement on NBN Co or other carriers playing a comparable role to connect premises and supply wholesale superfast broadband services on reasonable request from a retail provider,” Fletcher said.

“The baseline speed to be supplied is 25 megabits per second download, and five megabits per second upload. NBN Co will need to take all reasonable steps to ensure that 90 per cent of premises connected to its fixed line networks can receive broadband speeds of 50 megabits per second download and 10 megabits per second upload. NBN Co's fixed line networks should be able to connect at least 92 per cent of premises across Australia.”

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