Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019, Telecommunications (Regional Broadband Scheme) Charge Bill 2019

12 May 2020

At the end of next month the rollout of the National Broadband Network will, in theory, be complete. It's the end of a very long road, one which supposedly began with a sketch on the back of a napkin in 2009, with a destination that looks now very different to what we first imagined. The long road was marked by a number of potholes, wrong turns and breakdowns, and you might expect policymakers to have learned from this experience. Unfortunately, looking at the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019 and the Telecommunications (Regional Broadband Scheme) Charge Bill 2019, I suspect many of the lessons have gone unlearned.

The legislation makes a range of changes, and Centre Alliance is happy to support the majority of these. The superfast network rules, the statutory infrastructure provider regime and the transparency measures are sensible changes. My concerns are with the Regional Broadband Scheme. As with the NBN itself, I support the policy goal of the RBS. Too often, and with too many issues, Australians in regional areas are left behind. It is entirely appropriate that the government ensures all Australians can benefit from the superfast broadband, but I have concerns with how the government has decided to fund these services.

The scheme will be funded by a levy on broadband users amounting to $84 per year. This will add significantly and unnecessarily to the costs faced by low- and middle-income households. My first concern is with the amount. The amount comes from modelling undertaken in 2015, five years ago, which relied on cost estimates and market assumptions that were true at the time. A lot has changed in five years. The department assures us that nothing much has changed since then, but, if the original bill had passed in 2017, the charge would have been reviewed by the ACCC prior to implementation, and we would now be approaching its second review.

I understand the Labor Party intend to move an amendment which would require the ACCC to update the modelling. If they do indeed move such an amendment, Centre Alliance will certainly support it. I just do not understand why the government has not already done this or why it requires legislation to force it to do so.

My second concern is that the tax is targeted at users of fixed-line superfast broadband. NBN Co says the customers are already paying the tax, so this new tax will only affect the half-million households using other networks. But why does the government want to target these users?

My third concern is how technological change could undermine the funding base of the RBS. The modelling assumed few users would move from the fixed-line to wireless services because wireless couldn't offer the same data allowances. But, if you look at what's available now, it's clear wireless is already competitive with fixed-line services.

Once the tax is introduced, it will make fixed-line broadband more expensive, and some users will move to wireless services, there is absolutely no doubt. As customers go wireless, the RBS funding core will shrink, and eventually the government will have to recognise this funding method is not sustainable.

So I support the goal of the Regional Broadband Scheme but not the funding mechanism. I'm not alone in this. It is also the position of the Australian Competition and Consumer Commission, the Productivity Commission, Telstra, Optus, Vodafone and Vocus. But unfortunately it is not the position of this government.

When the RBS policy first appeared, and when it was revived last year, there were hopes the government would take the opportunity to reform the universal service obligation. The USO was last reformed in 2012 and now provides Telstra with almost $300 million a year with practically no strings attached. This money is paid to Telstra to maintain the copper network, which we know is becoming increasingly redundant, with no transparency or accountability.

A few years ago the Australian National Audit Office issued a scathing report about the USO agreement, and the Productivity Commission called for the scheme to be wound up. In an ideal world, the government would have listened to these concerns as well. They would have designed the RBS to replace the USO and reduced the burdens that weigh on the industry. Instead we have a scheme which makes broadband more complex and more expensive. At best, the Regional Broadband Scheme is a missed opportunity to ensure that Australians in regional areas have affordable access to telecommunication services. At worst, it is another last-minute patch job that will need to be fixed in due course.

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