Communications Day – story of the week

The story of the week relates to the levy for the Regional Broadband Scheme.  The Minister, Anika Wells, has announced a 74% reduction in the levy, with the announcement coming on the last parliamentary sitting day of the year before the statutory five-year review deadline. The change will have a significant effect on the industry as a whole, while the levy itself is "a rounding error in NBN Co’s accounts".

74% RBS cut unlikely to affect NBN pricing but offers boon to competitors  EXCLUSIVE

A decision by communications minister Anika Wells to slash the Regional Broadband Scheme levy to almost a quarter of its previous rate appears unlikely to impact the pricing of NBN Co products, but will dramatically improve the cost base of competitors such as Uniti and Vision.

The levy determination was tabled in federal parliament yesterday, its sudden appearance driven by the fact it was the last sitting day of the year before the statutory five-year review deadline. The RBS is intended to help NBN Co defray the cost of delivering services in its fixed wireless and Sky Muster footprints, although the original policy intention was to dampen the market share impact of so-called cherrypickers focused only on profitable markets.

The new determination sets the RBS at $2.17 per month per eligible premises with an active service, compared to 2024–25’s $8.45, and was based on advice proffered to the minister by the Australian Competition and Consumer Commission. The decision cuts the nominal levy pool from over $800 million to around $200 million.

The 74% reduction is a major boon to NBN competitors such as Uniti and Vision, the two of who paid much of what was last year about $25 million into the scheme based on around 250,000 eligible lines, especially with the end of exemptions based on line counts this year.

But with the Department still yet to release the outcome of its April 2024 s102ZFA Review of RBS legislation, there remain question marks over the accompanying policy review of the RBS. This includes whether there could be a change to the chargeable base of services required to pay the levy, currently applied to direct non-NBN fixed line analogues but not close substitutes such as fixed wireless. CommsDay understands there has also been lobbying of government to expand the application of the levy to cover business and backhaul connections.

The ACCC foreshadowed the large levy cut in a discussion paper last year, suggesting the RBS should only cover forward-looking costs and not historical costs.

NBN Co itself pays around 95% of the levy, effectively in the form of offsets. But since NBN tariffs are not calculated or regulated on the basis of an implied RBS surcharge but instead underlying forecast and actual costs, the telco has no regulatory impetus to pass on the effective $6.29 per month levy reduction in the form of lower tariffs. Indeed, doing so would create a potential $600 million hole in NBN Co’s annual revenues. That said, sources close to NBN Co suggested the telco could, nevertheless, be exposed to lobbying from access seekers or political pressures to reduce charges.

Despite all this, NBN Co yesterday maintained its previous criticisms of the ACCC’s methodology, pointing out that it needed to continue to invest in the wireless and satellite zones which cover the most dispersed seven percent of the population.

“It is essential that NBN funding under the RBS is adequate to enable the company to recover its costs and continue to maintain and upgrade its network to provide customers in regional and remote Australia with broadband services that enable them to participate in the digital economy,” an NBN Co spokesperson told CommsDay.

“NBN Co continues to invest heavily in better connectivity for regional, rural and remote Australia, including expanding fixed wireless services, upgrading satellite services and fixed line services.

“It is essential that fair and appropriate funding mechanisms are in place to share the cost if we are to continue to bridge the digital divide for regional Australians.

“We are currently assessing the impact of the ministerial direction and look forward to working with the government and industry on this important matter to protect and enhance the quality of broadband services available to customers in regional and remote Australia,” the spokesperson said.

Minister Anika Wells told CommsDay last night that “Australians deserve affordable and reliable internet no matter where they live, and the Regional Broadband Scheme ensures the sustainability of broadband services delivered to regional and remote Australia. We will continue delivering internet connectivity in our regions but we are also backing providers by reducing this levy.”

The levy was set in line with the ACCC recommendations, “with the base component covering net losses during the period of $2.925 billion (2025 dollars),” an explanatory statement said.

Earlier this week CommsDay filed a freedom of information request with the ACCC seeking release of the regulator’s advice to the minister, which it sent in May following its consultation. 

In providing its advice, the ACCC “undertook modelling with financial information provided by NBN Co and shortened the modelling period in line with its proposed approach during consultation,” the explanatory statement said.

“The amounts determined are based on updated cost modelling and administrative expense forecasts,” the minister’s determination said. “In line with the arrangements for the RBS, base component funds are passed on to NBN Co as currently the only eligible funding recipient. The reduction in the base component charge amount will reduce the small proportion of the total RBS base component amount received by NBN Co from other carriers,” it said, noting that NBN Co “provides over 95% of the RBS base component funds itself.”

CommsDay also understands that the ACCC was the subject of a spirited lobbying campaign from NBN competitors directly affected by the levy.

NUISANCE TAX: One analyst argued it might be better policy to do away with the tax entirely. Venture Insights' David Kennedy said that when the levy reduction was netted by the removal of exemptions and line growth, “our rough estimate for the FY26 levy (payable by non-NBN telcos) is $13.0 million, around half of the FY24 amount.”

“At this level the levy is a rounding error in NBN Co’s accounts, yet determining the amount, collecting the monies and disbursing them to NBN Co still required an ACCC evaluation, a departmental recommendation and ministerial decision, ACMA administration and uncounted hours spent by fibre operators collecting data and making submissions,” he said.

“The RBS is the kind of nuisance regulation increasingly holding the sector back. Given the meagre impact of the scheme on its intended beneficiary, it is very hard to justify the costs that it imposes on government and industry alike. Our view is that the scheme has served its purpose and its abolition would help, not hinder, further investment in our country’s digital infrastructure.”

 

IN TODAY'S ISSUE (28 November 2025)

A decision by communications minister Anika Wells to slash the Regional Broadband Scheme levy to almost a quarter of its previous rate appears unlikely to impact the pricing of NBN Co products but will dramatically improve the cost base of competitors such as Uniti and Vision. 

The default start date for Australia's Universal Outdoor Mobile Obligation has been brought forward by a year from the exposure draft of the legislation. Communications minister Anika Wells introduced the enabling bill for UOMO in the lower house yesterday, setting a commencement of 1 December 2027 rather than the originally contemplated 1 December 2028. 

Major data centre companies including AirTrunk, Amazon Web Services, CDC Data Centres, Microsoft and NEXTDC will today be unveiled as the first members of a new peak body designed to represent the sector and strengthen Australia's position in the global market for AI-era digital infrastructure. 

The chief executives of Australia's major telecommunications companies will join the board of the Australian Telecommunications Alliance after members voted unanimously at yesterday's AGM to amend the organisation's constitution and require directors to be the CEOs of member organisations. 

The Australian Competition and Consumer Commission's September quarter 2025 NBN service-quality dataset showed continued growth in FTTP adoption and broadly stable performance across copper-based technologies, with several indicators improving from earlier in FY25.

NBN Co exceeded the capital expenditure forecast it lodged with the Australian Competition and Consumer Commission in 2023 by more than $800m in FY25, according to its first post-variation SAU annual expenditure report. The extra spend was driven by faster-than-planned FTTP upgrades, higher fixed wireless upgrade costs and a surge in connect-and-assure activity, while operating expenditure came in below forecast. 

Swoop chair James Spenceley resigned ahead of the company's AGM as the fibre and wireless operator unveiled a turnaround plan aimed at simplifying operations and lifting returns.

The Australian Mobile Telecommunications Association has urged a more proactive approach to provide assurance to mobile subscribers that their handsets meet Australian requirements for contacting Triple Zero. 

Indicium Dynamics and Sustainable Timber Tasmania have begun work on what is set to become Australia's largest bushfire detection network, developing a state-wide early warning and situational-awareness platform under the Tasmanian Integrated Fire Camera Network project. 

Melbourne-based defence technology company Senetas has partnered with Nokia to provide quantum-encrypted networking technologies for mission-critical network environments. 

Plus more

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