NBN tax crushes competition

The Senate recently approved a $7.10 a month broadband tax for residential and business users of non-National Broadband Network (NBN) services.

This tax will begin from 1 July 2020 and will subsidise the bills of people connecting to NBN’s loss-making fixed wireless and satellite technologies in regional areas.

According to AusDroid, 5G mobile operators like Telstra support the broadband tax, principally because it excludes mobile services and should give them a pricing advantage:

Telstra and Optus, as operators of the two currently operational 5G mobile networks, support the proposed RBS broadly, and unsurprisingly oppose any reform of the RBS to include mobile services because they plan on heavily promoting 4G/5G home and business broadband services.

Much of the rest of the telecommunications industry, particularly NBN-comparable networks such as TPG and OptiComm (that will be subject to the RBS) oppose the RBS either largely or entirely.

It is worth pointing out that both the Productivity Commission (PC’s) and ACCC recommended against funding universal service obligations via levies like the broadband tax, instead arguing that general budget funding is more appropriate.

For example, here’s the recommendation from its 2017 Telecommunications Universal Service Obligation report:

RECOMMENDATION 8.2

The Australian Government should fund targeted measures to meet telecommunications universal service objectives principally through general government revenue rather than an industry levy. This would imply the ultimate removal of the Telecommunications Industry Levy.

Ultimately, this levy is anti-competitive and relies on taxing a relatively small number of non-NBN fixed line customers, rather than the community as a whole, in order to improve broadband services in regional areas.

Leith van Onselen

Comments

  1. So if this tax excludes mobile services it’s basically a subsidy to mobile network providers to roll out their 5G networks even faster.

    What’s next, a tax on anyone who doesn’t buy a Holden? Wait…

  2. alwaysanonMEMBER

    I live in a several hundred unit apartment complex in inner Sydney and TPG swooped in and did a Fibre-to-the-Basement thing where they ran one 10 Gig cable to cover the whole building. The service has been great and it costs less than NBN at $59/month for unlimited and rock solid 100/20.

    I started out with the NBN and it dropped all the time and was inconsistent. They said it was a wiring in the building problem and were jerking me around until my building strata manager was like “why are you messing with NBN – have a look at TPG”. Flipping across sorted all of my problems.

    This tax is basically meant for them/me from the look of it.

      • codeazureMEMBER

        Maybe military or academic would be a better way to describe a DARPA project that was widely used in universities.
        I guess if you consider public funded infrastructure socialist, then that’s a fair label.

        • drsmithyMEMBER

          Hard to think of a more socialist[0] thing in the world, than the Internet.

          Fundamental technologies all funded by public investment.
          Fundamental technologies are open standards and largely open source.
          Fundamentally designed to be distributed.
          Very few centralised points of control.
          Delivered extensively over publicly funded infrastructure (at least initially, much of it subsequently privatised).
          Vast volumes of unique content generated by end users.
          Little to no censorship (and what does exist is inherently dysfunctional)
          Little to no prioritisation of traffic (and huge outcries when this is attempted).

          [0] by the actual meaning of the word, rather than substitute-for-boogeyman meaning of the word.

  3. happy valleyMEMBER

    And what is the mechanism/method of the SFM benevolent dictatorship to impose this tax? Levied by the telcos and then passed on to SFM? or …?

  4. How will this impact legacy telstra smart estates (velocity fibre) where there is no nbn option (considered adequately served)? We already pay exorbitant prices due to lack of competition and they don’t intend to convert the network to nbn.

  5. Tassie TomMEMBER

    Oh dear!

    I am fully in support of the NBN (well, Rudd’s NBN before Abbott & Turnbull sabotaged it) as essential infrastructure that should be publicly managed in the same way that our roads are.

    However, this sets a very dangerous precedent.

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