Telstra calls for enterprise market to be exempt from NBN tax

Telstra calls for enterprise market to be exempt from NBN tax

Claims it is “not possible” to count the end points of every length of privately-owned cabling every month

Credit: NBN Co

Telstra has called for the enterprise market to be exempt from having to pay up under the proposed National Broadband Network (NBN) levy scheme.

In its submission to the inquiry for the Telecommunications (Regional Broadband Scheme) [RBS] Charge Bill, sometimes referred to as an ‘NBN tax’, Telstra claimed that, due to the impossible nature of recording and publishing every length of privately-owned cabling, the proposed tax should not be levied on the services delivered to enterprise premises.

The proposed legislation, if passed, would see telco carriers charged $7.10 per month per premises in order to offset unprofitable NBN fixed wireless and satellite services, which could potentially be passed onto end users.

“In enterprise (large business) markets, an end user may have multiple broadband services delivered to a single premises or multiple adjacent or non-adjacent premises, with these arrangements subject to constant flux in ways that are not transparent to carriers,” Telstra’s submission, dated 17 January 2020, noted.

Meanwhile, the submission claimed that residential broadband markets usually focus on one local access line providing one broadband service for one customer in one location and typically stay that way once installed.

“The purpose of the RBS is to provide a level-playing field for the NBN where its residential nationally-averaged pricing includes a cross-subsidy to pay for its loss-making rural services,” the submission continued.

“However, unlike its residential services, NBN Co’s enterprise services are provided on a geographically de-averaged basis meaning a cross-subsidy is not necessary.

“Moreover, because NBN does not account separately for its enterprise business, there is no evidence or certainty that any cross-subsidy is actually being paid by NBN Co.”

If the tax cannot be applied to residential markets only, the submission goes on to suggest an alternative — to apply the tax based on services rather than premises, as carriers are aware of the services they are providing as they provide appropriate billing.

As a result, the submission claims that the commencement date would need to be delayed by a year to 2021 if this alternative was chosen to account for further consultation and legislative changes.

Telstra’s submission differs to the one from Vodafone Hutchinson Australia, which slammed the proposal outright and instead suggested reforming existing policies and subsidies.

The Telecommunications (Regional Broadband Scheme) Charge Bill was first tabled in 2016, introduced as legislation in 2017 that lapsed and reintroduced in 2019.

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