18 Feb 2021

The Telecommunications Reform Package and the Regional Broadband Scheme: what it could mean for you

By Joel von Thien, Sunita Kenny and Simon Ellis

The Regional Broadband Scheme requires that all carriers, including NBN Co, contribute funding at a rate of $7.10 per month, per chargeable premises.

On 1 January 2021, the Regional Broadband Scheme (RBS) (through the Telecommunications (Regional Broadband Scheme) Charge Act 2020) came into effect. The RBS imposes a charge on carriers to offset the costs incurred by NBN Co (plus administrative costs) to build and maintain its fixed wireless and satellite services to regional Australia.

The RBS was first established by the Australian Government in May 2020, to ensure long-term sustainable funding arrangements to build essential broadband services to regional, rural and remote Australians. According to the Federal Government, fixed wireless and satellite technologies are essential to address the broadband access disadvantage historically experienced by regional Australia and are seen to be the quickest and most cost-effective way of providing broadband services to those areas.

Prior to 1 January 2021, these arrangements were funded through an internal cross-subsidy from nbn's fixed line networks. However, the fixed wireless and satellite technologies are predicted to incur a net loss of $9.8 billion over the next 30 years and so the RBS is intended to make the existing cost arrangements more transparent and spread the costs across all nbn comparable networks (with services supplied via the nbn access network continuing to pay around 95% of the cost).

As nbn will ultimately replace Telstra as the principal fixed-line network operator in Australia, appropriate funding is required to provide industry and consumers with certainty that all premises in Australia can have, and will continue to have, access to infrastructure that supports the delivery of superfast broadband services.

How will the Regional Broadband Scheme work?

The RBS requires that all carriers, including NBN Co, contribute funding at a rate of $7.10 per month, per chargeable premises. Chargeable premises are premises where a carriage service provider (ie. a provider of retail broadband services) provides a carriage service over a fixed line that is technically capable of providing download transmission speeds of 25 megabits per second (Mbps) or more.

Some exemptions will apply, including for small start-ups with fewer than 2,000 retail residential customers on all fixed-line networks. The RBS also includes a concession period that exempts the first 25,000 residential and small business premises on each carrier’s network, or the first 55,000 "recently connected greenfield premise"’ for carriers operating greenfield networks, for the first five financial years.

The ACCC will review the charge amount at least once every five years to ensure it accurate reflects the size of the fixed line broadband market.

Obligations on carriers

From 1 January 2021, carriers and nominated declared carriers that own, or are responsible for, local access lines that are capable of providing NBN comparable designated broadband services will be required to track the number of premises that are connected to each local access line. Carriers who own or who are responsible for these local access lines must report on the number of premises that are serviced by their access lines for each month during the period 1 January to 30 June 2021 by 31 October 2021 (the first reporting period), subject to some exceptions

It is intended that carriers would pay a charge for all premises serviced by fibre-to-the-premises (FTTP), fibre-to-the-node (FTTN), fibre-to-the-basement (FTTB), fibre-to-the-curb (FTTC) and hybrid fibre-coaxial (HFC) networks. The technical speed requirement is on the line, not the service, which means that carriers cannot avoid the charge by offering sub-25 Mbps services over lines capable of 25 Mbps or more.

Key dates for compliance

  • 1 January to 31 June 2021: The first reporting period runs from 1 January to 31 June 2021, during which carriers must report on the number of chargeable premises associated with its local access lines for each month.
  • 31 October 2021: Carriers must submit a report to ACMA by this date.
  • 1 November to 30 November 2021: Between this period (or a later date as determined by ACMA), ACMA will assess submitted reports to calculate the number of chargeable premises and the annual chargeable premises amounts to be charged to carriers.

Please contact us should you have any questions about reporting obligations under the RBS and TCPSS Acts.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.