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Govt introduces broadband tax legislation

Govt introduces broadband tax legislation

Proposed "NBN tax" laws hit parliament

The Federal Government has moved a step closer to making good on its plans to establish a broadband tax, introducing the proposed legislation into Parliament.

The Telecommunications (Regional Broadband Scheme) Charge Bill 2017 was introduced into the House of Representatives by Minister for Urban Infrastructure, Paul Fletcher, on 22 June.

Ultimately, the legislation is designed to establish an ongoing funding mechanism to help cover the operating costs of the National Broadband Network’s (NBN) fixed wireless and satellite services, so the company behind the NBN rollout, nbn, can continue to sustainably deliver high speed broadband to regional Australia.

If the legislation is eventually passed into law, it will require all carriers, including nbn itself, to contribute funding at a rate of approximately $7.10 per month, per chargeable premises.

It is aimed at setting up a funding arrangement for fixed wireless and satellite infrastructure through a new charge. The funding arrangement is officially called the Regional Broadband Scheme (RBS), and the bill itself represents a new taxation measure.

Under the proposed legislation, chargeable premises are premises where a broadband retail service provider (RSP) provides a designated broadband service. A designated broadband service, in this instance, is a carriage service provided over a fixed line that is technically capable of providing download transmission speeds of 25 megabits per second (Mbps) or more.

The proposed laws would make nbn’s internal cross-subsidy transparent instead of opaque, and create a level playing field by spreading this cost across all nbn-comparable networks, according to the Government.

It is understood that about 95 per cent of the RBS would continue to be paid for by nbn, whereas today it is 100 per cent. The remaining five per cent will be paid for by competing NBN-comparable wholesale networks.

It should be noted that the RBS is not levied directly at RSPs - carriage service providers, but rather to carriers – that is, the infrastructure provider, not the RSP.

In May, the Australian Competition and Consumer Commission (ACCC) granted permission for non-NBN networks to pass on the Government’s proposed RBS charge on their customer lines to help fund nbn's supply of non-commercial regional fixed wireless and satellite services.

“Our view is that the regulated prices based on the NBN prices may not have allowed these network providers to recover their reasonable costs if they were also required to absorb the proposed RBS charge,” ACCC chairman Rod Sims said at the time.

In February, the Australian Communications Consumer Action Network (ACCAN) expressed some concern that one downside of such a scheme supporting geographic equity is the potential for low income consumers to face barriers paying for services. 

"However, on balance we felt the issue was not significant enough to object to the scheme. The Productivity Commission has proposed that affordability measures should be considered in the Consumer Safeguards Review. We strongly support this review happening as soon as possible," ACCAN told ARN in a statement.

"There are economic and societal benefits in having everyone connected, therefore ensuring that broadband services are funded sustainably into the future is vital," it said.

Two bills will need to be passed by Parliament for the new law to come into effect. Debate on the legislation has been adjourned.

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