Government hands low-income broadband problem to NBN Co – Telco/ISP

A multi-year lobbying effort for a subsidized NBN service for low-income households met a new hurdle overnight, with the government saying the problem is ultimately up for NBN Co, although it would try to to help.

The award means neither the government nor NBN Co agrees who is responsible for broadband affordability and who should foot the bill to solve it.

Discussions about a specific NBN service for low-income people have been ongoing since 2019, a time when NBN Co’s constant pursuit of revenue increases has focused on the issue of broadband affordability.

But the issue has been constantly debated between the various parties and has been the subject of multiple regulatory and tariff reviews since without result.

One of the main long-standing proposals is for a government-subsidized offer for up to a million households on income support, but there is long-standing disagreement over which part of government should run it.

The Regional Telecommunications Examination [pdf]published last month, recommended “that NBN Co urgently finalize permanent measures to develop a subsidized broadband product on all of its access technologies”.

The official government response [pdf]released yesterday, jumped on attributing the issue to NBN Co.

“The recommendation to implement a subsidized broadband broadband product for low-income and income support recipients is for NBN Co,” he said.

“The government will explore options in this area with NBN Co.

“We note that NBN Co should also work with retailers and relevant agencies, such as the ACCC, in this regard.”

The government’s response added that “the affordability issues identified by the [review] committee are potentially significant and costly to address”, and that the government would “continue to review measures to improve affordability for low-income consumers and income support recipients in the Australian region”.

Costs are also a concern of NBN Co.

NBN Co has repeatedly postponed discussion and action on a low-income standing offer over the years since it was raised, primarily due to cost, revenue and implementation issues.

As late as late December 2021, NBN Co said it would struggle to finance a broad low-income offering on its own, and suggested the issue was up to government or industry to address.

Citing discussions between it, the internet industry, regulators and government in the second half of last year, NBN Co said “participants and discussion paper comments generally did not want the supply is financed by cross-subsidizing the wholesale prices of other consumers.”.

He went on to say that a broad-based low-income offering “would be financially difficult for NBN Co and the industry”, and that formulating such a “could have implications for full-price service costs and harm the competitiveness of NBN Co”.

This seemed to rule out that NBN Co could fund a subsidized low-income product out of its own pockets.

It is possible that NBN Co would still be forced to finance a low-income product, if it were included in a revision of the tariff and non-tariff conditions that govern the existence of NBN Co.

NBN Co argues that this document – known as the “Special Access Commitment” or SAU – is not an appropriate framework to address low income.

“NBN Co considers it not the role of the SAU to resolve these complex social policy issues,” he said.

It remains unclear what – if anything – on the issue of low income might be written in NBN Co’s revised SAU. In its December article, NBN Co proposed to include in the SAU commitments it would convene a “low income” working group. and related accessibility issues at least once a year” and a report on “activities” also once a year.

iTnews contacted an NBN Co spokesperson for additional comment.

“Complex social policy”

NBN Co’s characterization of broadband affordability as a “complex issue of social policy” is significant, if only because it lends weight to the idea that government should ultimately lead the process.

NBN Co argued in its December article that affordability is a broader discussion than just broadband pricing.

“Affordability is a complex policy issue and there are several factors, including affordable access to devices and digital literacy, that influence the perceived affordability of broadband services in Australia and several ways to address these affordability issues” , wrote NBN Co.

NBN Co said there were “differing opinions” on how a low-income product should be funded, but argued there was a “general preference for the offering to be directed to the market of retail or by the government”.

For what it’s worth, the regional telecommunications review board also doesn’t want to see the low-income issue wrapped up in the UAA renegotiation, if only because it would lead to further long delays in action. . The committee called for increased “urgency” on all sides.

History shows that where the question of who funds the grant is settled, construction is possible.

NBN Co successfully scrapped internet charges for low-income people during the first Covid lockdowns in 2020. The government touted the scheme at the time.