Australia plans controversial rural NBN levy

The Australian government is planning to impose a monthly levy on rival networks to the state-funded National Broadband Network (NBN) to help fund the roll out of the NBN to rural areas.

Communications minister Mitch Fifield said the government will seek to pass legislation that would establish an A$40 million ($30 million) Regional Broadband Scheme.

This scheme would be funded by a levy of A$7.30 per month for each fixed line connection provided by rival superfast broadband providers, increasing every year into 2022 when it reaches A$8 per month.

The levy would not apply for small companies with under 2,000 customers. Australia’s largest operator Telstra and main rival Optus will also be exempt because they are transitioning their fixed line operations onto the NBN as part of separate deals with the government.

But the government’s own advice indicates that such a levy will be passed on to consumers resulting in higher prices.

High-speed providers have complained that the proposed levy could “cripple” their operations, destroying 30% of their revenue, the report adds. The proposal has also been slammed as extremely anti-competitive.

The presence of competing fiber networks to the NBN has been a contentious issue since the project was first announced in 2007, with successive governments fearing that the rival services could “cherry pick” the network’s most lucrative customers in dense population centers without needing to invest large sums to reach sparse regional areas.