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Govt. Broadband Tax In Trouble: TPG, Telstra Pull Support

The Turnbull Government’s move to introduce a “broadband tax” appears in trouble after the Senate referred the tax to a committee for scrutiny and Telstra withdrew its support for the tax.

Leading network operator TPG has also launched an attack on the tax, claiming it is an attempt to throw regulatory hurdles in the path of fixed-line competitors such as itself in order to protect the NBN – but says this will not protect it from the rapidly growing wireless world.

The Government has also faced criticism for seeking to introduce the laws to Parliament before completion of consultations with the Communications Department.

The tax would see fixed-line NBN users paying rates beginning at $7.10 a month in a bid to pay for the future cost of the fixed wireless and satellite portions of the NBN.

While about 95 percent of those forced to pay the tax will be NBN fixed-line customers, the remainder will come from operators such as TPG, which has been deploying fibre-to-the-basement services in metro areas.

However in a major concession, telcos subject to the tax will not have to pay it on the first 25,000 lines for five years.

Telstra was scathing in its criticism of the Government’s action. It said its early support for the levy had been predicated on it being introduced to create a level playing field and would be payable only by networks that had infrastructure competing with NBN infrastructure – an apparent reference to TPG.

“However, the RBS has been broadened into a model that is more akin to an industry tax, which will include within its scope networks that are analogous to the NBN, rather than just networks,” Telstra said.

Optus has said that it wants to see corporate high-speed services removed from the scope of the tax.

No 4 telecoms operator Vocus says it does not support the tax, claiming it is likely to hit products that NBN Co does not compete with, like “dark fibre running between two business premises” and “leased high capacity services between datacentres and business premises”.

Meanwhile TPG has been sharpening its attack on the tax plan, saying the goverment plan will not protect the NBN business case.

“Wireless superfast broadband is a current reality and will only improve,” TPG said.

“Unless all parties are liberated from artificially created restrictions on competition, wireless providers with huge stockpiles of spectrum will beat the NBN on price and the benefits of mobility.”

Parliament rose on Thursday; sittings will resume on August 8.

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