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nbn tax is on the way

15 May 2017 by Michelle Lewis 0 Comments

The Government looks likely to impose a minimum monthly tax of $7.10 on fixed-line NBN users to pay for the future cost of the fixed, wireless and satellite portions of the NBN.

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iTnews reports the $7.10 minimum tax will be legislated as part of a package of telco law changes during parliament's winter sitting which ends on June 22.

Both the Labor and Coalition governments have spent billions of dollars on the National Broadband Network as a public investment with equitable access in mind. So the prospect of private competitors coming in to steal customers away — while the NBN is still obliged to service the less profitable rural areas — has always been a sensitive issue.

The tax will be charged to retail service providers of “superfast” fixed-line services who are competing with NBN Co., but the government has admitted the cost will be passed onto customers.

NBN costs to rise 

It is estimated there will be 380,000 superfast broadband services provided by carriers other than NBN Co. by 2022.

The government expects the tax will deliver between $40 million and $60 million to NBN Co. each year.

However, it admitted its scheme would result in end users paying higher prices.

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TPG a target, Telstra and Optus exempt

One high-profile target of the tax will be TPG, which in 2013 started building its own fibre optic connections to inner city apartment blocks, leveraging loopholes in NBN regulations.

Exemptions may be granted for telcos with superfast broadband networks if they have less than 2000 services using their network within a month, or if, like Telstra and Optus, they are transitioning their networks to the NBN.

Tax to pay for regional broadband

In its NBN funding options report, the Bureau of Communications Research proposes that a tax levied on such competing services would help pay for a Regional Broadband Scheme, which would “sustainably fund the long term costs” of NBN for rural Australia.

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