The Australian Government has today released details of its reform package on proposed changes to the regulatory regime applying to superfast broadband. The legislation is designed to give effect to the Australian Government's response to the Independent Cost-Benefit Analysis and Review of Regulation (Vertigan Review) and has been informed by the detailed analysis undertaken by the Bureau of Communications Research (BCR) on funding NBN Co Limited's (nbn) non-commercial services to rural and regional Australia.

The reforms cover three policy areas:

  • the competitive framework in which superfast broadband infrastructure providers operate, including requirements for providers of services to be structurally separated (with certain exemptions)
  • the establishment of a new regime to ensure people in all parts of Australia can access a superfast broadband service through access to nbn’s services.
  • a funding scheme to sustain nbn’s cross-subsidies between lower-cost metropolitan areas serviced with fixed networks and higher-cost regional areas services with satellite or fixed wireless services. The proposed Charge Bill will require all superfast fixed-line broadband carriers, including nbn, to pay a transparent and competitively neutral charge. In the first eligible financial year (2017-18), the base component of the charge will be $7.09 per line per month.

The Government’s reform proposals reflect its rejection of funding mechanisms for cross-subsidies, such as direct budget finance or accepting a lower rate of return on investments, contrary to the recommendations of the Vertigan Review. The levy is narrowly focused on operators of competing superfast fixed line broadband networks; contributions to the net costs of the cross-subsidy are not required from fixed wireless broadband or mobile broadband service providers.

Frontier Economics (Asia Pacific) prepared submissions for service providers both to the Vertigan Review and on the BCR’s analysis of funding nbn’s non-commercial services.

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