Second Reading Speech: Telecommunications (Regional Broadband Scheme) Charge Bill 2019

The Telecommunications (Regional Broadband Scheme) Charge Bill 2019, which I am introducing today, will, together with Schedule 4 of the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019, establish the Regional Broadband Scheme to provide a transparent and fair funding mechanism that supports the long-term operation of NBN Co’s loss‑making fixed wireless and satellite networks into the future.

The two Bills establish arrangements to underpin the ongoing availability of essential broadband services to all areas of Australia, particularly, rural and regional Australia. Minor changes have been made to the operation of the Regional Broadband Scheme in line with proposals tabled in the Senate by the Opposition that the Government announced it would support in the Budget last April. These changes provide greater certainty to telecommunications carriers and further ease the burden of transition to the Scheme for smaller carriers.

The Telecommunications (Regional Broadband Scheme) Charge Bill 2019 would impose, from the first July after passage, a monthly charge on carriers in relation to each premises connected to their network that has an active fixed-line superfast broadband service during the month. If the Bill is passed during the 2019-20 financial year, the proposed charge, which is a tax for constitutional purposes, would commence from 1 July 2020. The charge would have two components: a base component and an administrative cost component. The Bill would set the initial base component amount at $7.09, which is then subject to indexation. The Bill also sets the administrative cost component for the first five years. The combined component cap, comprising the base component and administrative cost component, is set at $7.10 which is also subject to indexation.

The money collected from the base component of the charge would be used to fund the losses NBN Co incurs in constructing and operating its fixed wireless and satellite networks, replacing the company’s opaque internal cross subsidy from its fixed-line networks. These networks provide access to essential high speed broadband services to up to one million premises, mostly in regional and remote areas. The money collected from the administrative cost component would fund the enforcement and administration costs of the Australian Communications and Media Authority (ACMA) and the Australian Competition and Consumer Commission (ACCC) associated with the Scheme.

The Bill would require the ACCC to give advice to the Minister in relation to the base and administrative cost components at least once every five years following a costing assessment - that includes industry consultation - being undertaken by the ACCC.

The administrative arrangements for the Regional Broadband Scheme, including arrangements for the annual (in arrears) assessment and collection of the charge, and associated reporting arrangements, are set out in Schedule 4 to the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2019. The ACMA is the administrator of the Regional Broadband Scheme; the Government expects that ACMA will engage with the telecommunications industry in applying the new regulatory framework.

The ACCC advises on the setting of charges; the Government expects the ACCC will also engage with industry. This engagement should aim to reduce the regulatory burden in implementing the Regional Broadband Scheme (and the one-off reporting arrangement), including by publishing interpretative guidance to industry.

Once the NBN rollout is complete, NBN Co is likely to have around 95 per cent of the fixed-line broadband market, which means it will continue funding the bulk of the net costs for providing broadband services to regional Australia.

Customers on NBN Co’s network will not experience price rises as the charge is already embedded in NBN Co’s pricing. For the remaining 5 per cent, many of these networks service medium and large businesses, which will for the first time contribute to funding regional broadband. It will be up to those networks to decide whether some or all of the charge is passed on to their customers.

Once established, the effect of the Regional Broadband Scheme will be that all NBN-comparable fixed-line networks contribute to transparent funding for regional broadband. In turn, regional Australians can have confidence that their essential broadband services will be available into the future.

I commend the Bill.