Broadband tax review: What it means for rural and regional businesses

The Australian Competition and Consumer Commission (ACCC) is reviewing the Regional Broadband Scheme (RBS) levy, also known as the broadband tax. The consumer watchdog is proposing changes that could alter how broadband services are funded across the country.

The RBS levy is currently set at $8.26 per month for non-NBN high-speed broadband providers. The levy supports NBN Co’s fixed wireless and satellite services, which provide internet access to regional and remote areas.

The ACCC has released a consultation and position paper on whether to exclude ‘historical losses’ from the levy calculation. These losses, incurred by NBN Co since the build phase of the network began in 2010, are currently factored into the levy.

The ACCC raised concerns in the consultation paper that including historical losses may exceed the actual costs of providing fixed wireless and satellite services today and could disadvantage non-NBN providers.

Potential broadband tax effect on small businesses

For small businesses in regional and rural areas that are reliant on satellite or fixed wireless services, any changes to the levy could affect broadband pricing and availability.

If the levy is reduced, it could lower costs for non-NBN providers, potentially increasing competition and offering more affordable or varied service options for businesses.

However, one of the proposals under review is whether to broaden the tax base to include more users — such as those on 4G and 5G fixed wireless broadband.

While this could help distribute the funding responsibility across a larger group, it may introduce new costs for businesses that rely on these alternatives.

For SMEs already managing tight budgets, any adjustments to the funding mechanism could have practical implications for their operating costs.

Notably, the current levy exempts carriers with fewer than 2,000 premises, and transitional concessions apply to the first 25,000 premises for larger carriers. These concessions could indirectly affect the service availability and affordability for small businesses.

Broader policy context for these changes

The ACCC’s work is part of a broader government review of universal telecommunications services, including how non-commercial services like fixed wireless and satellite are funded.

This review reflects changing market dynamics, including the growing role of alternative broadband technologies like low-earth orbit (LEO) satellite services and 5G.

While LEO satellites, such as those offered by Starlink, are not currently included in the levy, they are becoming a significant player in the Australian broadband landscape.

For example, both Telstra and Optus have partnered with Starlink to provide satellite-powered broadband and voice services to rural Australian businesses.

The increased competition from LEO satellites comes as NBN Co continues to offer its Sky Muster satellite service, which has faced criticism over slower speeds and data caps compared to Starlink.

In response, NBN Co has introduced plans like Sky Muster Plus Premium, offering unmetered speeds up to 100Mbps to address some of these challenges.

Meanwhile, 5G fixed wireless services are emerging as another competitive option, particularly in metropolitan areas where infrastructure and speeds are improving.

The ACCC is seeking feedback on these proposed changes, with submissions open until December 13.

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