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Budget 2019-20: Government revises regional NBN subsidy

Budget 2019-20: Government revises regional NBN subsidy

Caps Regional Broadband Scheme charge

Budget documents reveal the government will revise the cap on its yet-to-be-legislated Regional Broadband Scheme subsidy for the NBN.

The government is yet to pass the bill that will implement the RBS (sometimes dubbed the ‘NBN tax’), which is intended to subsidise so-called ‘non-commercial’ NBN services: NBN Co’s fixed wireless and satellite services used to connect premises in regional areas.

The government in December 2016 first revealed details of the RBS, which it said would help NBN Co defray the $9.8 billion over three decades that non-commercial services will cost it. The intention is to impose the RBS on superfast broadband services: Those that deliver wholesale speeds of 25 megabits per second or faster.

Under the proposed legislation, each eligible service will be slugged with a $7.10 monthly charge: A $7.09 base component and a small administrative component. Telcos will be able to pass the cost on to customers.

The costs can be varied by a decision of the communications minister, but under the current legislation the sum of the base and administrative cost components cannot exceed $10 a month, indexed annually to the CPI.

The inability of the government to push the legislation through parliament last year saw it revise the start date of the scheme in its 2018-19 Mid-Year Economic and Fiscal Outlook.

In the federal budget, handed down today, the government made additional changes to the RBS. It said it would reduce the cap from $10 to $7.10 (indexed yearly to CPI) and also provide a “new five year exemption from the RBS for the first 55,000 greenfield premises activated on certain carriers’ networks”.

The changes are expected to cost the government $21.2 million over the forward estimates.

The budget also includes funding for the government’s regional connectivity program, details of which it revealed last month.

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Tags nbn coTelecommunicationsNational Broadband Network (NBN)Regional Broadband Scheme (RBS)Budget 2019-20

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