Committee leaves door open for expanding broadband tax to mobiles in future

If NBN uptake is lower than expected, a statutory review could look at expanding the broadband tax to mobile services.

Just over two months after they were referred to a Senate committee, the Australian government's Telecommunications (Regional Broadband Scheme) Charge Bill 2019 and Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 have received the approval of the Senate Environment and Communications Legislation Committee.

The Regional Broadband Scheme, also known as the broadband tax, was recommended to be passed by the committee back in September 2017 and would establish a AU$7.10 monthly charge to all fixed-line broadband customers to subsidise those connecting to NBN's loss-making fixed wireless and satellite technologies.

This time around, the only change recommended by the committee was to increase the transparency surrounding NBN's use of the monthly charge.

"The committee recommends the implementation of additional transparency measures, developed in consultation with NBN Co and relevant stakeholders, to enable carriers, and indeed the public, to easily determine that the off-set arrangements are being managed effectively," the committee's report released on Friday said.

Otherwise, the committee said the Bills had the "right balance" and should be passed.

On the contested issue of whether the monthly charge on fixed-line connections would drive users toward wireless services such as Optus' 5G Home product, the committee said a later review could look at it.

"In the event of a material change to the NBN uptake rates, the committee agrees that the statutory review could consider expanding the levy base to include mobile services," it wrote.

Speaking at a hearing earlier this month, representatives from the Department of Communications had said fixed-line services were not directly substitutable for 5G services, and thus NBN would not lose a significant number of users to 5G.

"Our view is, and our view still remains, that mobile and fixed-line are complementary services," Department of Communications assistant secretary of broadband implementation Andrew Madsen said at the time.

"Most households have a fixed-line and they have mobile services. So there's strong growth in mobiles. There's strong growth in fixed-line, and the level of data that's being transmitted over fixed-line is growing rapidly.

"We don't see that that's going to change significantly."

On the other side of the fence, TPG complained in a submission to the committee that its fixed-line footprint was under wireless attack.  

For the most part, the committee's view relied on the arguments put forward by the department.  

Labor senators also had concerns regarding how NBN would direct the money raised once it hit their books; the modelling the levy was based on; and whether telcos would be ready to measure premises served.

In a hearing earlier this month, Telstra said that while it can count services, it is harder to count premises served.  

"Labor senators recommend that the Australian Communications and Media Authority exercise forbearance towards carriers who are unable to implement the broadband tax in their systems by the required date, and if necessary, the Government consider delaying the commencement date of the levy," Labor wrote.

The Opposition senators also recommended that the Australian Competition and Consumer Commission publish new modelling no later than 60 days after the Bill receives assent. The senators added it would be best for enterprise customers to pay the tax rather than have it absorbed by enterprise carriers.

"Labor Senators note evidence from NBN Co that it does not price the tax into its enterprise products, and note concerns this could create a market dynamic where the industry as a whole is forced to absorb some or all of the enterprise levy on their bottom line," they said.

Despite these concerns, none of them were enough to prevent Labor from backing the Bill.

The Greens, meanwhile, wrote in the dissenting report that the broadband tax should be tossed and the gap filled from government coffers.

"Australian Greens senators are focused on ensuring sustainability of funding arrangements, and agree with many submitters that the most equitable and sustainable funding model for the RBS is direct Budget funding," they wrote.

"This view is also supported by the Australian Competition and Consumer Commission."

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