Messy NBN levy is under fire

James Riley
Editorial Director

NBN Co may have posted what it calls “solid” third-quarter results, with a 112 per cent increase in total revenue to $1.4 billion for the nine months ending 31 March 2018, but questions remain about its longer-term sustainability.

The company – responsible for the roll out of Australia’s National Broadband Network – attributed the growth to the so-called progress it has made on construction, activations and customer experience improvements during the period.

Outgoing NBN Co chief executive Bill Morrow said the results demonstrated its “customer experience program is working, and we know there’s more to do to get this right.”

Bill Morrow: Another set of numbers, another round of brick-bats

However, this is a far cry from what Shadow Minister for Digital Economy Ed Husic had to say when he fronted Parliament on Thursday to debate the introduction of the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2017.

Under the proposed Bill, broadband providers will be subject to a levy of $7.10 per month for every NBN fixed-line service. The idea is that the levy will help pay for the NBN roll out, which otherwise would not be commercially viable.

Mr Husic said the proposed levy was only necessary because the Prime Minister was deploying a “mess of a broadband network” that cost more to deploy, delivered slower speeds, would be more costly to maintain, and would require expensive upgrades in the future, that would generate less revenue from those willing to pay.

“The Coalition told us they will deliver 25Mbp/s by December 2016, the minute they’re in office, the minute they win the election, they said they couldn’t make that promise and tried to blame [Labor] …and yet they still pressed ahead with it,” he told the Parliament.

“They knew they couldn’t deliver the NBN for $29 billion by the end of 2016. So now we have nearly $50 billion as a multi-technology mix, where questions are being raised about how much extra it will cost to build, how much less it will generate in terms of revenue, and in the meantime Australian consumers suffer.

“[Consumers also] wonder whether it will be better to go on the soon-to-be rolled out 5G wireless network where they will actively contemplate spending more on data on another system, rather than use this mess of a broadband network. This will put further questions whether or not the actual network itself will face a slow drip away from it where it loses the people who should be using the broadband network using a 5G network slip even further

“This why now they need do put this type of levy in place because if they don’t, they’re in a world of pain.”

Mr Husic said the proposed amendment had the Parliament cornered; it could agree to the Bill in order to avoid worsening position of the NBN, but without fixing the underlying mess. He described it as a “horrible position”.

“If we don’t support [the amendment] it puts NBN in a worse position. As much as we are uptight that people will be paying $100 more a year for their broadband for those areas that are not on the NBN network, to not do so puts us in a worse position,” he said.

Do you know more? Contact James Riley via Email.

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