Get ready for the NBN tax

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Your internet bill looks set to get a little bigger thanks to new legislation set to be introduced by the government.

It is pushing to introduce a $7.10 ‘minimum monthly broadband tax’ for fixed-line NBN customers. This is said to be used to help fund the future costs associated with building the fixed wireless and satellite – ‘Skymuster’ portions of the National Broadband Network.

The government plans to introduce a raft of telecommunications changes including this new broadband tax in parliament’s current sitting, which ends on June 22. The new tax is officially called the Regional Broadband Scheme (RBS) charge bill. So while your bill is highly unlikely to increase exactly $7.10 per month, telcos will be unlikely to absorb all the costs, instead passing it on to consumers.

However, not all NBN customers will be affected. It is said that only ‘superfast’ customers will pay the tax, with ‘superfast’ referring to NBN speeds of Tier 2 or higher. Tier 2 features a maximum 25/5Mbps download and upload speeds. The base NBN speed is just 12/1, but NBN Co says this is not a ‘superfast’ speed.

While the Communications department began consulting on this tax in late 2016, the package is still under review and only started taking industry submissions in February. However, the Government’s intention is still to release the new tax mid-year.

What will the RBS mean for me?

The RBS – as the name suggests – is a new tax imposed on fixed-line NBN customers to help subsidise the cost of fixed wireless and SkyMuster satellite services. The government argues that this has been brought about because of a shortfall in current subsidies already embedded in NBN Co’s wholesale prices.

This means that if you’re a fixed-line NBN customer, your bill is probably going to go up. The minimum price you can expect to pay for unlimited data on Tier 2 speeds is about $65 a month. Realistically, with this new tax imposed, you could expect prices to increase to around $70 a month or more, however it’s all speculation at this point.

Not helping causes is NBN Co’s increased competition faced by the likes of TPG. TPG is currently building its own FTTB (fibre to the basement) services, which could mean better competition in metro areas. This means that the government-backed NBN Co faces increased pressure to drop its prices, which means subsidies to fixed wireless and SkyMuster services could be affected – hence the tax – while there is increasing reluctance to find room to build the NBN in the federal budget.

Fixed-line NBN customers are in for an interesting road ahead. While increased competition could bring prices down, the tax could even out the playing field a bit. Either way, it might pay to shop around for a cheaper plan, or at least budget extra money per month for your current one.

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