NBN Co pushes for broadband tax on business market

NBN Co has revealed that the success of a planned broadband tax is predicated on it applying to “all business services”, in a move likely to exacerbate tensions of scope creep.

Telstra, Vocus, and Optus all raised concerns last month that the tax appeared aimed at protecting NBN Co’s future entry into the lucrative enterprise market, where the network builder hopes to secure up to 15-20 percent of its total revenue.

They called for fixed-line enterprise and corporate services to be exempt from the tax, arguing it would add cost to services for which NBN Co did not even have competing products.

But NBN Co today fired back, saying those claims were “misleading” and that its network coverage targets included businesses of all sizes. Specifically, NBN Co said its remit “does not distinguish between small business and larger enterprise customers”.

“Including business services in the funding base is a critical component of the RBS,” NBN Co said.

RBS stands for regional broadband scheme and is colloquially known as the broadband tax.

Applying the broadband tax to corporate services would mean a hike of $7.10 per line per month on normal fees for users of NBN-comparable services operated by companies like TPG.

“Failure to include business services will mean that the contributions of residential services would be required to fund the losses NBN Co incurs to serve regional and rural Australia.”

Further, NBN Co appeared to suggest that the current construct of the broadband tax would break if enterprise and corporate services operated by NBN Co and all other telcos weren’t taxed.

“NBN Co reiterates the need for the inclusion of all business services in the RBS to adequately subsidise the loss making rollout of satellite and fixed wireless networks, noting the important contribution that these services will make to ensuring affordable superfast broadband services are available to those in regional and remote areas,” NBN Co said.

NBN Co will launch its main foray into the business Ethernet market later this year. The launch date has been pushed back twice and is currently slated for the last quarter of calendar year 2017.