Funding of universal telecommunications services (RBS Review)

In Australia, most telecommunications services are supplied on a commercial basis in a competitive market. However, it has long been recognised that industry has not had enough incentives to service non-commercial areas in the past, particularly in more remote and less‑populated areas, given the relatively high costs of providing and supporting those services and the limited revenue available. It is essential that Australians have access to telecommunications services that are reliable, robust and able to meet the needs of consumers, particularly for those in regional and remote areas. As a result, safeguards such as the USO for voice and Statutory Infrastructure Provider laws for broadband are in place so that people across Australia, including in non-commercial areas, can choose to access baseline fixed services at their premises.

On 27 October 2023, the Minister for Communications, the Hon Michelle Rowland MP, indicated that the government would consider and seek stakeholder views on sustainable long-term funding of non-commercial telecommunications services as part of the consultation process to consider options for Better delivery of universal services.

A range of funding mechanisms currently contribute to the funding of these services, including an $100 million annual contribution from government, the RBS which contributes to the provision of broadband through fixed wireless and satellite services, and the Telecommunications Industry Levy (TIL), which supports voice service provision and other public interest telecommunications services such as payphones, Triple Zero (000) and the National Relay Service.

The RBS was set up by the Telecommunications (Regional Broadband Scheme) Charge Act 2020 (Charge Act). The arrangements for administration of the RBS are under Part 3 of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (TCPSS Act). The RBS supports the anticipated long-term net losses of NBN Co’s non‑commercial fixed wireless and satellite networks. These net losses were initially to be funded through an internal cross subsidy from profitable fixed-line NBN services to the loss‑making fixed wireless and satellite networks. The RBS was designed to make this subsidy transparent and spread it across all NBN‑comparable fixed-line networks.

A number of issues have been raised by stakeholders regarding the operation of the RBS and the TIL, including the operation of 2 different but related industry-based telecommunications funding mechanisms. The current review provides an opportunity to consider funding arrangements more broadly, including the merits of maintaining 2 different industry funding mechanisms.

Under section 102ZFA of Part 3 of the TCPSS Act, the Minister must cause to be conducted a review of the operation of the RBS legislation (and related matters) in the first 4 years of operation (i.e. by 26 May 2024) or as soon as practicable thereafter. The review will be conducted by the department, which will prepare a draft report for consideration by the Minister for Communications. The final report will be tabled in Parliament.

The Regional Telecommunications Review will also provide advice to the government on future delivery of universal services.

Summary of stakeholder views

A summary of feedback provided by stakeholders to this consultation is available below. The summary also provides an overview of stakeholder views on the Better delivery of universal services.

Overall, the consultation process demonstrated there is broad support for change to universal service funding arrangements to a more streamlined, efficient funding mechanism.

Further detail on views by stakeholders on specific issues is available in the summary paper. 

Relevant documentation

• Funding of universal telecommunications services (incorporating public consultation for s102ZFA Review of RBS legislation) – discussion paper
• Modernising universal telecommunications services – summary of feedback

Mapping

NBN Co and Telstra have provided detailed geographic information on the distribution of their services across Australia. To assist with developing submissions, the department has created a map which allows users to gain an understanding of Universal Service Obligation (USO) services in their area, along with NBN Co’s platforms and mobile coverage. 

The map can be found on the department’s website: NBN Co and Telstra USO Service Data Map.