Legislation obliges large network providers to help cover rural NBN costs

Anula Wiwatowska - Offsite Editorial Lead

Last updated 18 May 2020

Legislation passed the Senate last week requiring all Australians to have access to broadband and have larger fixed line broadband network operators help cover the cost.

Large broadband network operators are private enterprises which have networks sold direct to consumers, such as TPG which operates an extensive fibre network across the country.Starting from July 1, 2020 these operators will make mandatory contributions to the Regional Broadband Scheme.

The scheme was introduced to ensure all Australians, namely those in remote and rural communities have access to reliable broadband from the NBN or a comparable broadband network.

These contributions will make up 5% of the total $9.8billion cost of NBN Co’s fixed wireless and satellite networks, with NBN Co continuing to pay the other 95%.

According to the Department of Infrastructure, Transport, Regional Development and Communications, this scheme won’t impose new costs on NBN users as the fee is already built into the existing NBN pricing. It will, however, ease the financial burden of the project for NBN Co which if left with the full cost, could have led to a wholesale price hike.

In accordance with the Universal Service Guarantee, all premises will have the infrastructure to access peak speeds of at least 25Mbps download and 5Mbps upload, although these are not the numbers customers can expect to find on their speed tests.

Peak speeds refer to the ‘best-case scenario’ speed, meaning that every Australian connection needs to be able to reach these baselines, despite there being no minimum requirement for how fast the connection actually is.

Typical evening speeds for Sky Muster Satellite NBN 25 customers sit at around 15Mbps and fixed wireless customers are likely to achieve the same.

Competition may be set to change these numbers and the average cost per month however, with the legislation also passing an easement of carrier separation rules.

The ruling will allow providers to operate wholesale and retail businesses at an arm’s length. Meaning we are likely to see more relationships like Telstra and Belong, where the same service is being sold by one company under two brands, for different prices.

Emergence of more smaller providers is tipped to improve competition, leading to more affordable options for all Australians.

Anula Wiwatowska

Offsite Editorial Lead | Instagram

Anula is the Off-Site Editorial Lead for WhistleOut Australia, and an award winning tech journalist. She has been writing about the Australian telco industry, and consumer technology for over five years, and has been known to tell her Uber driver which phone they should upgrade to next.

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