The Australian Greens welcome the introduction of the statutory
infrastructure provider (SIP) obligations as set out in Schedule 3. The SIP
obligations will ensure that all Australians have access to high-speed
broadband, with minimum speed requirements of 25/5 Mbps and requirements for
SIP services to support voice services on fixed lined and wireless platforms.
These requirements are consistent with the Productivity Commission's review of
the Telecommunications Universal Service Obligation.
We broadly agree with the amended network rules for carriage service
providers set out in Schedules 1 and 2.
The Australian Greens are committed to ensuring all Australians have
access to affordable, high quality internet services. Fast, reliable broadband
has the potential to transform the lives of Australians. The NBN is not just a
piece of infrastructure; access to digital networks is a right and it is
incumbent upon government to make it fast and affordable.
In 2011, a UN Special Rapporteur report declared that internet
access is a human right and recommended that "each State should thus
develop a concrete and effective policy, in consultation with individuals from
all sections of society, including the private sector and relevant Government
ministries, to make the Internet widely available, accessible and affordable to
all segments of population".
In 2016, the UN passed a non-binding resolution condemning intentional
disruption of internet access by governments and reaffirming that "the
same rights people have offline must also be protected online".
Australia's internet is lagging behind the rest of the world, in terms
of speed and affordability.
Akamai's State of the Internet Report
for Q2 2017 shows Australia is in 50th place in the world for internet speeds,
slowing climbing from 51st place for Q1 2017.
The Digital Australia: State of the Nation
report shows the cost of fixed broadband makes affordability Australia's lowest
performing digital readiness aspect, with Australia ranking at 57th
in the world.
The Digital Australia report also shows that Australia's average
mobile broadband speeds of 15.7 Mbps (placing Australia at 11th in
the world) are out-performing average fixed broadband speeds of 11.1 Mbps.
The bills seek to implement components of the Government's response to
recommendations of the Vertigan Panel. As noted in the Dissenting Report from
Labor and the Australian Greens
on the Telecommunications Legislation Amendment (Access Regime and NBN
Companies) Bill 2015:
The Vertigan Panel was assembled by the former Communications
Minister, Mr Malcolm Turnbull, in December 2013. Instead of appointing
Infrastructure Australia as promised, Mr Turnbull appointed former Liberal
Party staffers, Liberal Party advisors and noted and strident critics of the
NBN to conduct his cost benefit analysis and review of regulation, with
The Senate Select Committee into the National Broadband
Network subjected the Vertigan Panel's "independent" cost benefit
analysis of broadband to rigorous scrutiny in early 2015. The Senate Select
Committee concluded that 'the Cost-Benefit Analysis is a deeply flawed and
overtly political document. It is not credible and is not a reliable basis upon
which to make decisions about the NBN'.
Particulars of the bill
Schedule 3 specifies that the Minister will have the power to make a
legislative instrument setting out circumstances in which the SIP obligation
does not apply, and requirements for people purchasing a SIP service. The
Australian Greens note that the option to access internet services is vital for
all Australians. Associate Professor Mark Gregory of RMIT University states
If approvals cannot be achieved or there are safety concerns,
the alternative is to provide a satellite connection. To consider a situation
where a SIP should not have to provide a connection in 2017 is unacceptable.
This is an example where the legislation is poorly drafted.
The RBS is proposed as a narrowly-targeted, technology-specific tax. In
this form, it is not robust to changing telecommunications technologies and
markets and risks distorting competition between technology types. TPG states
The Bills are anticompetitive because they directly attack
the operations of a particular market segment, the fixed line network operators
that the Department of Communications and the Arts (DOCA) considers to be
directly competing with nbn Co.
The Bills ignore the rapidly growing importance and technical
advancement of fixed wireless and mobile networks and their ability to take
considerable broadband market share from nbn Co in profitable urban areas.
The Bills' narrowly targeted tax on fixed line broadband
networks will distort competition in broadband markets as too large a financial
burden is being placed on the owners of a particular type of network
technology. The cost will be passed on to consumers and risks consumers
shifting their buying preference to other technologies such as fixed wireless
or mobile that become comparatively cheaper because they are not subject to the
The DOCA's decision to ignore the competitive impact of
mobile and fixed wireless broadband networks is based upon its analysis of
increasingly out of date evidence regarding the ability of these technologies
to compete with the nbn's fixed line technology. Mobile and fixed wireless
broadband are already successful substitutes for fixed line broadband for a
growing segment of the community and will increasingly affect nbn Co's
viability and its ability to cross-subsidise non-economic services.
Similarly, OptiComm highlights the excessive burden placed on a narrow
segment of the market:
Most carriers and carriage service providers will not be
required to pay the levy and the burden of paying for the nbn in non-economic
areas will fall on a small number of carriers and their end-user customers.
This results in the captured carriers being required to pay a far higher tax
than would be necessary if the tax was collected from the broader industry.
The Productivity Commission also notes in their report that the funding
scheme for the RBS should seek to minimise distortions that can be heightened
with a narrow levy:
The Regional Broadband Scheme is proposed to (at least
initially) include only a narrow levy base. In principle, the choice of funding
model for non-commercial services should seek to minimise distortions in the
telecommunications market, the risk of which is heightened with a
narrowly-based long-term industry levy. As such, the Government may need to
revisit the merits of alternative funding arrangements for nbn's non-commercial
A preferable option would be for the non-commercial services to be
funded from the general budget. This is an approach that is recommended in
industry submissions, including from the Vocus Group and TPG, as well as in the
By far the best option for funding any ongoing subsidy would
be through consolidated revenue. Among other advantages, that would allow
Parliament and the public to assess in an ongoing way the benefits of using
taxpayer funds for this purpose rather than others.
Alternatively, the RBS could be extended to include a broad base of
telecommunications operators and technologies. OptiComm supports this approach:
We ask that the Senate Committee recommend amendments to the
Bills in order to replace the narrowly targeted new tax with a levy similar to
the existing USO and collected from all participants of the telecommunications
The Vocus Group also recommends the need for a broad, rather than
narrow, focus for funding non-commercial NBN services:
The risk and uncertainty arising under Option 3 [RBS] can be
avoided by having a levy that has a broad rather than a narrow funding base. In
particular, any levy should be technologically neutral, with mobile, fixed
wireless and satellite networks included within the levy.
A more effective way to deal with the Market Change Risk is
to have a broad funding base across the industry. If a broad funding base is
used from the outset, there will be no need for any regulatory resets to that
funding base and the uncertainty and risk.
TPG also notes the broad funding base of the Telecommunications Industry
Levy, which supports the USO:
Restricting the RBS Charge to high speed fixed line operators
provides a far smaller collection base than the Telecommunications Industry
Levy (TIL), which supports the Universal Service Obligation (USO) and has close
correlations to the nbn's regional broadband scheme. In comparison, the USO is
funded by a levy collected from all participants in the telecommunications
industry with eligible revenue above a set threshold. The result of the
narrowly targeted tax is that the RBS Charge per premise or service is
significantly higher than would be required if the tax is levied across the
industry as a whole.
The RBS and funding of NBN non-commercial services should not be
considered independently of the Telecommunications Universal Service Obligation
(USO), as recommended in the Productivity Commission's report:
The funding of nbn's non-commercial services should,
moreover, not be considered independently of universal service policy reforms.
In this context, the Commission has faced a unique challenge in responding to
proposed government policy on the funding of nbn non-commercial services (the
Regional Broadband Scheme) Charge Bill 2017 before the conclusion of this
The Vocus Group also highlight the need to consider funding of NBN
non-commercial services alongside the USO:
Consideration of how to recover the costs of the Non
Commercial Services should not take place in isolation from consideration of
the Universal Service Obligation.
Given that the USO and the RBS have the same basic policy
objectives, and the need for coherent and holistic regulatory policy in this
area, as part of its inquiry, the Productivity Commission considered the RBS.
Vocus notes that the Productivity Commission was not in favour of the RBS being
considered in isolation from the USO reforms and was not in favour of the Narrow
Approach for the RBS.
TPG also addresses the importance of considering the RBS and SIP
obligations alongside the USO, noting recommendations from the 2015 Regional
Telecommunications Review (RTIRC) and the Productivity Commission report:
The RTIRC recommended development of a new broad based
Consumer Communication Fund for voice and data services and replacing the USO's
TIL with a levy to support loss-making regional infrastructure and services,
with scope to include subsidies for the non-commercial nbn services. The RTIRC
stated, such an overarching regulatory structure would avoid piecemeal and
short term regulatory adjustments by putting a more relevant and comprehensive
framework in place.
USO policies are designed to address the affordability, accessibility
and availability of basic communications services. It is clear that nbn
infrastructure, complemented by mobile coverage, will meet the objective of
providing USO availability. The nbn's uniform pricing structure and its funding
helps to address USO affordability and accessibility. Clearly, the nbn forms
part of Australia's USO policy fulfilment.
In considering the future of the USO, the Productivity
Commission recommended "baseline" telecommunications standards be set
and that nbn Co have a clearly defined role in providing baseline
telecommunications services, in effect largely replacing Telstra as the USO
provider. This USO or baseline role is clearly what the nbn's satellite and
wireless services will be fulfilling in non-economic areas as voice and
broadband services will be provided on that infrastructure in areas where they
would otherwise not be available. The funding of the nbn's non-economic
services is intrinsically tied to Australia's USO policy.
Vodafone notes that the RBS does not include a sunset clause and risks
becoming an entrenched tax that is used for purposes that deviate from the
original intention of the scheme:
It is concerning for example that the RBS does not have a
sunset clause or automatic requirements for fundamental reviews in certain
circumstances, such as privatisation of the NBN. VHA understands the RBS is
intended to be in place until at least 2040.
The costing on which the RBS pricing was based has already changed
considerably, as identified by TPG:
nbn Co's average cost of connecting a fixed wireless service
is now $3550 per premise, a decrease from its previous estimate of $4000
to $5000. This is a decrease of between 11% and 29% in nbn Co's costs and makes
fixed wireless cheaper than nbn Co's FTTP connections. This raises questions
regarding whether the estimated costs used in the BCR's calculations of the
levy required to fund the nbn's non-economic services are now obsolete and
whether the RBS Charge needs to be reassessed, particularly as the cheaper
fixed wireless network will be rolled out to 50% more premises than previously
The proposed legislation requires the ACCC to give advice to the
Minister about the charge amount at least once every five years. TPG notes that
a shorter review period is necessary due to the rapid nature of technological
advancements in telecommunications and to assess the extent of competitive
distortion caused by the tax:
The Bills propose a review within the first 5 years. We
submit that it is appropriate for the legislation to be reviewed every 18
months after implementation to gauge the effect on competition and the ongoing
sustainability for the funding of the nbn's non-economic services. A short
review date is necessary because the Bills risk considerable competitive distortion
and because the telecommunications industry is subject to imminent and relevant
technological advancement, particularly with regard to 5G mobile.
The Australian Greens recommend revising the Regional Broadband Scheme,
taking into consideration updated costings, the current and emerging state of
telecommunications technology and markets, and recommendations from the
Productivity Commission regarding the Telecommunications Universal Service
Rice Senator Sarah Hanson-Young
Senator for Victoria Senator
for South Australia
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