New levy will help fund the rollout of the National Broadband Network (NBN) in regional areas but additional charges may be passed on to consumers.
The Federal Government has proposed to introduce a levy on telecommunication companies as part of a new Regional Broadband Scheme (RBS) which will help pay for fixed-wireless and satellite broadband services to regional Australia. The levy will start at $7.30 per month for each fixed-line connection, which will increase to $8 by 2022, according to Communications Minister Mitch Fifield.
See Also: Inside The Downfall Of iiNet Sydney
Telcos including Telstra and Optus are exempt from the levy as they’re moving their networks onto the NBN. Telcos with less than 2000 customers are also exempt. But companies like Opticomm and TPG, rivals of NBNCo, that have their own high-speed network infrastructure and a large customer base will be slugged with the levy. NBNCo has to pay the administrative cost of the RBS.
Speaking with The Sydney Morning Herald, Opticomm chief regulatory officer said the levy will eat away at 30% of the company’s revenue and it will either have to increase its prices or go out of business.
A Government spokesperson told The Australian that consumers may have to pay more for their NBN services but expects prices to fall in the long term:
“Infrastructure providers would compete on the same cost basis. There would be some administrative costs in facilitating payments from the charge… In total, NBN end users would pay less in the long term and the net proceeds from the charge may enable NBN to reduce its prices faster.”
The proposed legislation for the levy, if passed in parliament, will commence on July 1, 2017.