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Altnets asked to cough up A$60 million per year to help cover costs of state-owned wholesaler’s satellite, fixed-wireless services.
Broadband prices in Australia are set to rise after the government this week proposed levying a charge on ISPs to help state-owned wholesaler NBN cover the cost of its fixed-wireless and satellite services.
The government has put the cost to NBN of serving fixed-wireless and satellite broadband customers at A$9.8 billion (€6.9 billion) between 2010-11 and 2039-40. Recovering these costs directly from end users would make these services prohibitively expensive, so NBN must look elsewhere.
At the moment, NBN cross subsidises the fixed-wireless and satellite services with revenue generated by its fixed-line operation. But this has been made harder because NBN faces more competition than expected in metropolitan areas.
With that in mind, the Department of Communications and the Arts on Monday unveiled the Regional Broadband Scheme (RBS), which proposes that NBN covers around 90% of those costs, and that the remainder – between A$40 million (€28.2 million) and A$60 million per year – is paid for by alternative providers.
In the first year, altnets will have to pay A$7.09 per month plus a A$0.0127 monthly admin fee for every fixed broadband connection. Exemptions have been proposed for altnets with fewer than 2,000 subscribers, and services delivered via fixed-wireless connection or over lines incapable of providing a minimum speed of 25 Mbps. ISPs that are in the process of transferring to the NBN’s fixed-line network won’t have to pay either.
"NBN and NBN-comparable providers would pass the charge on to their end user base," the Department said, in a regulatory impact statement (RIS).
The government has proposed the RBS for the simple reason that NBN’s fixed-line business faces more competition than expected.
"Network providers have expanded into population-dense areas with existing infrastructure beyond what was originally conceived," the Department said.
The government cited fibre-to-the-basement (FTTB) provider TPG, which it said is rolling out networks to high-value apartment blocks and undercutting NBN’s prices.
"While NBN is able to reduce its prices in commercially viable areas to respond to competition, if it does so, it will be less capable of supporting cross subsidies to fixed-wireless and satellite services," the government said.
In addition to the RBS, Australia has also proposed introducing a Statutory Infrastructure Provider (SIP). SIPs will be required to connect premises to high-speed broadband upon request from a retail service provider. NBN will be the default SIP, but other network operators will be able to be SIPs where appropriate.
The government has also proposed new wholesale and retail rules designed to stop anticompetitive behaviour and put downward pressure on broadband prices.
Australia has launched a public consultation on the proposals; interested parties have until 3 February to respond.
