Small business cops extra charges for high-speed internet

Wednesday 14 December, 2016 | By: Default Admin | Tags: NBN rollout, high-speed internet, broadband levy

Small businesses are deeply concerned by a proposed “tax” to help pay for the National Broadband Network.

The Chamber of Commerce and Industry (CCIQ) says taxpayers are already footing the bill for the $56 billion NBN rollout and will rightly be angry about Federal Government plans for a new levy.

The charge has been targeted at telecommunications companies competing with NBN Co to help pay for its fixed wireless and satellite program.

But CCIQ says the package of reforms announced this week, including the Regional Broadband Scheme (RBS) – requiring all fixed-line, high-speed broadband carriers to pay $7.30 per month for every single fixed-line connection, plus administration costs – is troubling.

CCIQ Senior Policy Advisor Catherine Pham said it will ultimately lead to small businesses paying more for their access to the broadband network.

“The new levy is a change the government admits will lead to higher prices for internet consumers and goes against the advice of its own expert panel, which warned it would cause ‘greater distortions than it is intended to remedy’,” she said.

“Expected to raise only $40 million a year, the new levy will severely compromise the ability for smaller rival companies to provide competing services and products at a cheaper rate to the benefit of consumers.”

Ms Pham said the RBS could push smaller internet providers, who were often more efficient and innovative, to increase their prices or risk going out of business.

“The decision is anti-business and anti-competitive, and goes against everything the government is trying to achieve as part of their own National Innovation and Science agenda,” she said.

“How are businesses to compete globally and keep up with the fast pace of technological change, when the fundamental tool we need is going to cost the greatly?

“We all know internet is essential to commerce in the 21st century. Businesses have flourished from 24-hour online trading, flexible working arrangements, time savings and efficiencies, as well as new ways of connecting and interacting with customers – all of which could not have been possible without access to internet.

“Small businesses in particular will feel the effects of higher internet costs, together with ever-increasing electricity costs and other operating costs, especially in the current flat-profit environment.”

CCIQ noted that the RBS will offer exemptions to the levy for providers with fewer than 2000 users a month, as well as for providers who will be transitioning their networks to the NBN.

“Providers like Telstra and Optus, who will be exempt from the levy, are already making big profits from the NBN. Telstra is expected to take in $90 billion during the 30-year-plus life of the NBN,” Ms Pham said

“Smaller telco companies can rightly oppose the tax which would see their larger competitors, who already hold a substantial duopoly, gain even more of an advantage over them.

“While CCIQ supports the necessary expansion of the NBN into regional and rural areas, it is a government obligation and not the burden of a small portion of the private sector who are striving to offer better services.

“The government made a commitment at the start to roll out the network nationally, including to our regional and rural areas.

“Funding was to come from taxpayers’ money and from private investments, although we understand that a government loan is now to replace the latter.

“With substantial contributions towards a national scheme, coming equitably from the widest base possible, it is hard to comprehend why the new levy seeks to target a group of smaller companies who are plugging the missing pieces of the mismanaged NBN.

“Many of these companies have expedited the roll-out of fast internet to numerous pockets of the country following strong demand from its internet users, who simply could not risk the long-time frames of the NBN.

“Other smaller telco companies, who saw opportunities for a more efficient and cheaper internet service to benefit consumers, are being penalised under the proposed scheme.

“We urge the government to drop the RBS and find the $40 million a year from increased productivity and targeted savings measures such as automating government services.”

Consultation on the Telecommunications Legislation Amendment (Competition and Consumer) Bill 2017 and Telecommunications (Regional Broadband Scheme) Charge Bill 2017 Exposure Drafts are open until 3 February 2017. The Turnbull Government intends for the legislation to commence from 1 July 2017.

 

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