NBN Co chief calls for government subsidy to offset cost of rural NBN

NBN Co chief calls for government subsidy to offset cost of rural NBN

NBN calls for "levy" on competitors like TPG to ensure a sustainable economic model

NBN Co chief executive, Bill Morrow, has called on the federal government to impose a cross-subsidy or infrastructure levy on competitors to offset to the cost of delivering broadband to rural areas.

Morrow's call came during NBN Co third quarter results call where he indicated the company would make a submission on on the subject of cross-subsidies to the Vertigan review.

Morrow said the whole premise of the NBN was to be able to have the same price and coverage for all Australians.

He said this placed major constraints on the business and that high value metropolitan customers would have to subsidise the the rural customers.

This comes as TPG readies its Fibre-to-Basement product in metropolitan areas.

"To provide for the areas in the remote parts of the country you need to subsidise from the areas where it's economically viable."

"If there's infrastructure competition than the cost overall of building the network goes up."

"What we then get is an economic model which is no longer sustainable.

The Vertigan panel has been asked to assess the regulatory environment of the NBN, the competitive environment of NBN Co and the product and pricing structure for the NBN.

Deloitte senior economist, Henry Ergas, has been appoint to lead to four-member panel.

Morrow said a "levy" or "cross-subsidy" would help offset the cost of getting broadband to rural areas and the NBN Co would be making a submission to the panel.

"We think we need to consider the government imposing a cross-subsidy on infrastructure," he said.

"This is the same thing we hope the Vertigan panel considers in their discussions."

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Tags NBN Co chief executive Bill MorrowVertigan review


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