Scrapped broadband subsidy will lead to higher setup fees

New rural customers may face setup fees of up to $1200 once the Australian Broadband Guarantee is terminated mid-next year

New connections to satellite and WiMAX services currently under government subsidy could cost in excess of $1200 once the Australian Broadband Guarantee (ABG) expires on 30 June next year.

The program, first initiated in 2008, subsidised the setup cost of internet connections that do not meet metro-comparable broadband speed benchmarks. The department has reviewed the program on an annual basis, with benchmarks adjusted accordingly; current standards stipulate speeds of at least 1024 kilobits per second (Kbps) downstream and 256Kbps upstream with six gigabytes (GB) of monthly data quota. The plans must not cost individual customers more than $2500 over three years.

The Department of Broadband, Communications and the Digital Economy this week confirmed the expiry of the Federal Government program for all eligible technologies.

“All currently registered ABG providers’ funding deeds are due to expire on this date, regardless of technology platform utilised,” a spokesperson told Computerworld Australia in an email.

The subsidised internet plans are largely offered via satellite access from the likes of Optus, HarborSat and iiNet subsidiary Westnet. Internode also offers WiMAX plans under the program to residents in the Coorong, Yorke Peninsula and Riverland/Murraylands regions of South Australia.

A 36-page summary of the NBN Co business case released publicly this week indicates the wholesaler hopes to have an interim satellite solution by June next year, ahead of the launch of two Ka-band satellites in 2015 worth an estimated $1 billion. The satellites will ultimately serve the three per cent or approximately 200,000 premises not covered by either fixed wireless or fibre connections.

See the key findings of the NBN Co business case summary

The interim solution will utilise spare capacity on existing satellites, to be determined under a tender released by NBN Co shortly. The service’s launch is slated to coincide with the termination of the Australian Broadband Guarantee, allowing those who require the service to switch across.

A spokesperson for Internode said pricing was unlikely to change for existing customers once the guarantee expired.

However, customers who don’t currently have a connection under the subsidy and fall outside the NBN satellite solution’s scope may be forced to pay $1200 for a satellite or WiMAX connection.

“The only difference will be, after June 30, if you want to connect to the network and you would currently be eligible for an ABG subsidy, you’d have to pay the $1200 connection fee,” the Internode spokesperson said.

“Pretty much everyone that wants to be connected to the networks has done it over the past couple of years. There’s been a fair availability of it.”

Computerworld Australia contacted Westnet and Optus for comment but did not receive a reply a time of writing.

Follow James Hutchinson on Twitter: @j_hutch

Follow Computerworld Australia on Twitter: @ComputerworldAu

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