The Government established the Regional Broadband Scheme (RBS) to ensure transparent and sustainable funding for essential broadband services in regional, rural and remote Australia.
NBN Co's fixed wireless and satellite networks provide broadband access to around one million homes and businesses across regional Australia. However, these networks are very expensive and were estimated to incur net losses of $12.9 billion over 30 years (ACCC report on modelling of the Regional Broadband Scheme Levy initial base component | ACCC). Initially these losses were set to be funded by an ongoing opaque internal cross-subsidy from NBN Co's profitable fixed-line networks.
The RBS makes this cross-subsidy transparent and requires other competing fixed-line networks to contribute to the cost of funding broadband in regional Australia.
The RBS does not impose a new cost on NBN users—the cost is already built into existing NBN pricing. Around 95 per cent of the cost of funding NBN Co's fixed wireless and satellite networks continues to be paid for by NBN Co. The remaining five per cent is being paid for by competing NBN-comparable fixed-line wholesale networks. This establishes a competitively-neutral funding mechanism for broadband services in regional and remote Australia.
The RBS was designed to ensure that essential broadband services will continue to be provided in regional Australia well into the future, regardless of who owns the regional networks and who is the dominant fixed‑line provider in profitable metropolitan areas.
How does the RBS work?
The Regional Broadband Scheme applies to all NBN-comparable fixed-line broadband networks. Under the RBS, carriers are required to pay a monthly charge for each 'chargeable premises' on their network, that is, for each premises on their network with an active high speed superfast broadband service provided over a local access line. The monthly charge comprises a base component designed to cover the net losses of NBN Co's fixed wireless and satellite networks and a small administrative cost component designed to cover the costs of administering the RBS. The requirement to pay the charge is set out in the Telecommunications (Regional Broadband Scheme) Charge Act 2020.
Carriers pay a charge for all premises with an active service provided over fibre to the premises (FTTP), fibre to the node (FTTN), fibre to the basement (FTTB), fibre to the curb (FTTC) and Hybrid Fibre‑Coaxial (HFC) networks capable of offering speeds of at least 25/5 megabits per second (Mbps).
The initial amount for the charge was set out in the legislation but is CPI indexed. The Australian Communications and Media Authority (ACMA) collects the charge and advises carriers on the monthly charge that applies in each eligible financial year—see About the Regional Broadband Scheme (RBS) | ACMA.
Carriers with fewer than 2,000 premises are exempt from paying the charge. The RBS also includes a concession period that exempts the first 25,000 residential and small business premises on each carrier's network, or the first 55,000 'recently connected greenfield premises' for carriers operating greenfield networks, for the first five financial years. This was designed to support market competition and help smaller carriers and operators of greenfield networks transition to paying the charge.
The RBS charge is collected one financial year in arrears. The first eligible financial year ran from 1 January to 30 June 2021. Carriers are required to maintain a record of their chargeable premises and reportable associations each month.
Carriers report their chargeable premises and associations for the previous financial year to the ACMA in October each year. The ACMA will assess carriers' charge liability and invoice them each year. The monies paid are transferred into a Special Account established by the legislation. As currently the only eligible funding recipient, NBN Co may apply to offset its charge liability against the funds it is set to receive through the RBS.
The Australian Competition and Consumer Commission (ACCC) will review the charge amount at least once every five years to ensure it accurately reflects the reasonable costs of NBN Co's fixed wireless and satellite networks and the costs to administer the RBS.
The Department is responsible for distributing RBS funding to eligible funding recipients (currently only NBN Co) via a contract or grant under section 80 of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the TCPSS Act).
In line with the requirements of sections 102ZB and 102ZC of the Telecommunications (Consumer Protection and Service Standards) Act 1999 (the TCPSS Act), the Department maintains registers of contracts and grants for the funding of Fixed Wireless Broadband and Satellite Broadband entered into under section 80 of the TCPSS Act. The register of contracts and grants is available online.
Review of the RBS
To ensure the policy and legislative settings for the RBS remain appropriate in a changing telecommunications market, section 102ZFA of Part 3 of the TCPSS Act requires that a review is undertaken in the first four years (or as soon as practicable after that).
The review of the RBS is currently underway and is part of consideration of sustainable long-term funding of voice and broadband services in rural and remote areas. Details of the public consultation undertaken are available here: Funding of universal telecommunications services (RBS Review). This consultation is part of work underway on Modernising universal telecommunications services.