ACCC shifts support for broadband tax on 4G and 5G fixed wireless

The ACCC has made a case for the ‘broadband tax’ on NBN-equivalent services to be expanded to 4G and 5G fixed wireless, after years of resistance to lobbying by NBN Co.

In a submission [pdf] to a review of the scheme, first reported by CommsDay, the competition watchdog said it would conditionally support 4G and 5G fixed wireless users paying the ‘tax’.

Known as the regional broadband scheme (RBS), it is an $8.26 monthly levy on NBN-like services that ultimately goes to NBN Co to fund its “loss-making non-commercial fixed wireless and satellite services.”

Since the scheme was introduced, there has been a long-running lobbying effort by NBN Co for cellular fixed wireless services to be included.

NBN Co has long seen these services as competitors - and certainly some telcos have marketed such services as being NBN-equivalent alternatives for users with lower speed tier or usage requirements.

The ACCC had resisted because it did not view cellular fixed wireless services as being equivalent to fixed-line NBN services in a broader sense.

But with the RBS scheme under review, the ACCC has indicated it would now support cellular fixed wireless services being taxed.

“Under the current RBS funding arrangements, as more consumers substitute 4G and 5G fixed wireless services for fixed line broadband services, the RBS funding base will continue to be eroded over time,” the ACCC said.

“This will necessitate ongoing increases to the RBS levy amount, which is likely to further disadvantage fixed-line network operators in those geographic areas where they compete with 4G and 5G fixed wireless providers.”

The ACCC noted “some risk” in a levy on 4G and 5G fixed wireless services making them more expensive, and less of a “competitive constraint” on NBN Co’s own pricing.

The commission indicated that expansion should be accompanied by some redefinition of who pays.

“If the government decides that it is appropriate to broaden the RBS charge base to include 4G and 5G fixed wireless broadband services, consideration would need to be given to the best approach for revising the RBS charge base unit,” the ACCC said.

“This could potentially include simplifying the charge base unit by basing it on services in operation, rather than ‘chargeable premises’.”

The implication appears to be that a single premises could have multiple cellular fixed wireless services; if each is taxed, the levy amount could be lower and less complicated than a per-premises charge.

The ACCC added that it did not support taxing LEOsat services, “as these services are largely supplied in areas outside of NBN Co’s fixed line footprint and are currently priced at a significant premium to NBN equivalent services.”

“They are not considered to be close substitutes in terms of price at this time,” it said.