Customers of NBN competitors will cop a new $7.30 'broadband tax' every month

BEIJING, CHINA – JUNE 24: Xu Can of China delivers a punch to Corey McConnell of Australia during their WBA Super Featherweight Title battle match at Capital Indoor Stadium on June 24, 2016 in Beijing, China. (Photo by Lintao Zhang/Getty Images)

The consumer watchdog has decided customers that receive superfast fibre broadband sourced from outside the NBN will be slugged a tax to help coverage in regional Australia.

The Australian Competition and Consumer Commission on Friday handed down its final decision on the government’s proposed Regional Broadband Scheme, which proposes slugging operators of non-NBN superfast networks a levy to go towards NBN’s obligations to service regional areas that are not financially viable.

A Bureau of Communications Research report last year recommended a monthly levy per high-speed line of $7.30 in financial year 2018, to be stepped up to $8.00 by 2022.

The commission, in a change from its draft stance, has decided to allow the non-NBN operators to pass on the levy to end customers.

“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,” said ACCC chairperson Rod Sims.

The most common scenarios for superfast broadband supplied by a non-NBN player are new housing estates and inner city apartment complexes. The government has long been worried that those suppliers cherry-pick profitable city clientele, while the NBN is left with covering unprofitable rural areas.

The ACCC stated the major operators in the non-NBN space are Telstra (with its South Brisbane and Velocity Estates fibre networks), TPG (with its Sydney and Melbourne fibre-to-the-basement to apartment complexes), Vocus, LBN Co, Opticomm and OPENetworks.

Smaller broadband providers that are supplying less than 12,000 customers will be exempt from the rules as the extra charge would pose “an unreasonable burden” with “little benefit to customers”.

The federal government is pushing to get the Regional Broadband Scheme through parliament during its current winter sitting, according to iTnews.

Geoff Neate, the managing director of Spirit Telecom, a non-NBN fibre broadband provider for Melbourne’s Eureka Tower skyscraper, said the ACCC decision would not affect his business in the short term but did express concerns.

“The exemption is way too low and does not reflect the material performance difference between a superfast internet provider, like Spirit, and that of a highly CVC-contended NBN reseller,” he told Business Insider.

“Higher exemption levels would not disturb NBN’s business model.”

Sims said that its new wholesale terms for the non-NBN industry would “help deliver better service performance for customers” and ” allow retailers to provide faster services at a lower average price”.

“One of our main aims has been to ensure that internet retailers and their customers supplied via the non-NBN networks will not be worse off than if they were supplied internet services by the NBN,” said Sims.

“Consistent with our draft decision, the prices have been set in line with NBN prices and will change with NBN prices over time. Prices will reflect the growth in traffic across the high speed internet sector, which will continue to drive down the average cost of supplying services.”

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