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nbn™ has been tasked with providing broadband to all premises at affordable prices, regardless of the cost to provide these services. This will result in a number of services that will be loss making or non-commercial (i.e. fixed wireless and satellite services). The current arrangement is for nbn™ to fund these services through higher costs for services over other parts of its network. However, the Government wishes for the funding to be transparent and for all network providers to contribute to these services, not just nbn™.

The Bureau of Communications Research (BCR) recently consulted on potential alternative funding arrangements for these non-commercial services. They posed a number of questions about how these services could be funded, to which ACCAN provided feedback. Our submission focused on four areas:

    • concern over the affordability of services;

    • equity of services between consumers in fixed wireless and satellite areas and those in the fixed footprint;

    • concern that the BCR was not focusing on consumers use of broadband; and

    • queried how commercial services offered over the fixed wireless and satellite network will be treated. 

The funding model chosen will impact on the prices all consumers will pay for broadband and may impact on competition. In providing feedback ACCAN noted that the terms of reference of the consultation and the models that are being considered are confined to commercial models, with levies on industry to fund these services. Providing universal access to broadband is an objective of the Government and as such there are other funding models which could be examined.

ACCANs concerns, and examples of issues, are summarised below: 

    • Affordability of services for all Australians 

      43% of households with income of $40,000 or less, do not have an internet connection. Added to this is the fact that lower income household spend more of their income on communications services than higher income households. ACCAN is concerned that a number of households in the fixed footprint may not be able to afford to have broadband services, and this levy is adding to the cost of services in an unequitable way. Funding of non-commercial services through general taxation and Government equity would be fairer. The effect of funding the non-commercial areas on consumers should be given careful consideration.
    • Serious equity issues exists as consumers in the fixed wireless and satellite areas will pay more for services

    • Example 1: difference in the basket of services for consumers in fixed footprint compared to non-commercial areas.

      Broadband plans in fixed wireless and fibre areas are currently priced the same with many RSPs, for example iiNet prices a 25/5 Mbps plan with 250GB of data at $74.90, regardless of technology. This includes a 'Netphone' (VoIP) with free local and national calls. However, if consumers feel that a VoIP service is not sufficient and want to have a home phone, then those in the fixed wireless area will be penalised with a more costly product compared to those in the fibre areas.

        • Consumers in fixed wireless areas will pay $29.95 for a home phone over the legacy network. This does not include any calls, which cost per call or an additional $20 for a local, national and mobile pack [$125 per month total for broadband and a phone service].

        • Consumers in the fibre area can add a 'Fibre phone' for $19.95, and includes local and national calls (additional $10 to include mobile calls) [$105 per month total for broadband and a phone service].

Therefore consumers in wireless areas have to pay $20 a month more than those in the fixed footprint to have an equivalent communication service (broadband and dedicated phone service). Satellite areas will likely face the same issue when plans are offered over the Long Term Satellite Services.

    • Example 2: satellite customers will face additional charges that don't apply to any other areas.

      Consumers in the satellite areas will be charged additional charges compared to those in the fixed footprint and fixed wireless, such as charges for connection, relocation, disconnection of previous government subsidy dishes and repair. This, in effect, is nbn™ passing through some of the costs to fund these services to the consumer. The BCR should take into consideration that consumers in these areas are not receiving an equivalent service at the same price, but are in fact paying extra for these services.
    • Consumers use of network not the focus

      It is proposed that only high speed network providers, i.e. networks that offer speeds greater than 25Mbps, will have to contribute to the funding of these services. These are comparable to nbn™, which was designed to provide a high speed broadband. However, ACCAN has concerns over this definition as it focuses on the network and technology and not the services that the consumer receives. For example, take the basic NBN entry package, a 12/1Mbps service - this is not a high speed broadband service! However, all consumers on the nbn™ network will be contributing to the funding of non-commercial services. In fact some 'Legacy Services' provide greater speeds than this. A consumer on ADSL2 may receive up to 24Mbps and through their retailer may not be contributing to the funding of non-commercial services. ACCAN is concerned that consumers may be charged a 'high speed levy' for being on a high speed network when they are not receiving the benefit of such a network. This results in equity and value for money concerns.
    • Commercial uses of the fixed wireless and satellite networks 

      There are a number of commercial products proposed by nbn™ over the fixed wireless and satellite networks, such as the technology choice product (aka fibre on demand), Wi-Fi on airlines and the use of the network by mobile providers. ACCAN wonders how these will be factored into the model.

pdfACCAN submission to BCR428.69 KB

docxACCAN submission to BCR100.1 KB