Broadband tax, in some form, is still on the horizon

The government introduced legislation to establish the Regional Broadband Scheme, which is intended to ensure there are long-term sustainable funding arrangements in place, via a levy on premises, to provide essential broadband services to regional, rural and remote Australians.

The legislation to introduce the scheme, the Telecommunications (Regional Broadband Scheme) Charge Bill 2019, was tabled late in 2019 and has only moved to the second reading, however it is still on the agenda and, according to information and technology news service itNews, the government intends to commence the scheme by 1 July 2020.

The Regional Broadband Scheme (RBS) applies to all NBN-comparable networks. Under the RBS, carriers will be required to pay $7.10 per month for each premises on their network with an active high speed superfast broadband service provided over a local access line.

To ensure the funding base for the RBS remains appropriate, the legislation requires that a review is undertaken in the first four years. The ACCC will also review the charge amount at least once every five years to ensure it accurately reflects the size of the fixed-line broadband market and the reasonable costs of NBN Co’s fixed wireless and satellite networks.

However in its submission to government on the scheme, the nation’s largest telco Telstra has asked for the scheme to be delayed until mid-2021 in order to fix what it sees as huge problems in the intended way the scheme is applied. (See submission 16 on this Parliament webpage.) It has also strongly suggested applying the levy to residential, rather than business, premises.

itNews editor-at-large Ry Crozier writes that the tax is intended to apply to both residential and “enterprise” (business) fixed-line premises. “However, Telstra argues it is difficult to calculate the number of premises associated with an enterprise account, and therefore the tax should either not apply to enterprise, or the way it’s applied should be redefined.”

Telstra says the reason for such difficulty is that carriers often have limited visibility of the number of premises served by their superfast infrastructure, “even where they are providing retail broadband services using that infrastructure, in particular because in many cases there is privately-owned in-building cabling between the carrier’s network and the end user’s broadband access points”.

The main concern is the uncertain liability that would result were the RBS to be implemented as it stands in legislation.

While the easiest thing (according to Telstra) for the government to do would be to not levy the charge on enterprises, but to focus on the residential market, it says an alternative solution would be to redefine how the tax is applied.

“If the charge cannot be limited to residential markets, it should be based on services rather than premises,” Telstra says. “Carriers always know how many services they are supplying because services are billed for, eliminating the information problem associated with the premises model.”

As further consultation would be necessary, it urges the delay of the RBS until at least 1 July 2021.


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