NBN tax: Govt says no need to include mobile services in subsidy scheme

Cost per gigabyte currently too high for mobile broadband to undermine fixed-line

The federal government has reiterated that it is not appropriate to extend the so-called ‘NBN tax’ to include mobile broadband services “at this time”.

The government is pushing ahead with legislating the Regional Broadband Scheme (RBS), which will impose a levy on “superfast” (25Mbps+) fixed-line broadband services in order to help subsidise the rollout of unprofitable fixed wireless and satellite NBN services.

Under the RBS, NBN-comparable fixed-line services will be subject to a $7.09 levy.

The Australian Competition and Consumer Commission revealed in May 2017 that telcos will be able to pass the charge on to their customers. (The ACCC indicated in a draft market study released last year that its view is that the RBS should be replaced with direct government funding for the delivery of non-commercial NBN services.)

In October NBN CEO Bill Morrow said that the spread of mobile broadband and the impending rollout of high-throughput 5G networks will affect NBN’s profits. In an interview with Fairfax Media, the CEO noted that the RBS excludes wireless services.

“The government has two options: to regulate to protect this model, or to realise that the NBN won't have the finances it thought and might require some off-budget monies to go in to make it happen,” Morrow said.

The CEO wouldn’t speculate whether NBN would deliver the profit required of it even if it benefited from a levy on mobile broadband connections.

The federal government has previously indicated it didn’t believe it would be necessary to slug wireless services with the RBS charge and confirmed in a response to a federal parliamentary inquiry’s report on the issue that it had no plans to do so.

The government’s response to the report was published late last week.

“The RBS is the most equitable and transparent way to fund broadband services that are critical to regional communities across Australia,” the response stated.

“The RBS will adapt to changes in the telecommunications market over time, and strikes an appropriate balance between the needs of regional Australians and the business needs of telecommunications providers.”

Under the legislation proposed for establishing the scheme, the ACCC will review the RBS charge amounts (the scheme has both a base fee and an administrative fee) every five years.

The government said that it does not view mobile broadband services are “presently substitutable for fixed line broadband services due to a number of factors, including the substantially higher average cost per Gigabyte of data on mobile plans.”

The government revealed in December it would implement a replacement for the Universal Service Obligation (USO), which guarantees all Australians have access to basic telephony services.

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Tags broadbandNetworkingnbn conational broadband networkTelecommunicationsNational Broadband Network (NBN)Regional Broadband Scheme (RBS)

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