Turnbull moves on NBN subsidy arrangements

Australia's government has slapped the defibrillator on the Vertigan review of the National Broadband Network (NBN), and is asking for submissions about how subsidies for unprofitable services in remote areas should operate.

Have your say on funding options for #nbn non-commercial services visit http://t.co/T3UkVduXvP #CommsAuBCR

— Dept. Communications (@CommsAu) May 8, 2015

Underneath the noise of jockeying over this week's federal budget, the Department of Communications Tweeted the announcement of its consultation at 8:29pm on Thursday evening (May 7 2015), posting the consultation paper on Friday May 8, with submissions due June 1.

Being fully social-media-compliant, at the time of writing the Department hasn't yet announced the review on its media release page.

The consultation, here, is based on Vertigan's complaint that the internal cross-subsidies used to equalise wholesale prices nation-wide weren't transparent.

The government decided the subsidies should come from some kind of industry levy, saying in December 2014 that “The cross‐subsidies which are currently embedded in NBN Co’s wholesale prices will be replaced by transparent funding provided via contributions sourced from owners of high‐speed broadband access networks”.

The new paper says the satellite and fixed wireless services – the most subsidised, since they service the most remote users – are going to lose in the vicinity of $AU5.3 billion between now and 2021.

The consultation, from the Department of Communications' Bureau of Communications Research, canvasses ways to assess the costs of the so-called “non-commercial services”, whether commercially-focussed costing is appropriate for these services, and how the economic models for costing services should work (for example, over what time period, and whether “non-commercial services” costings should be tied to the nbn^TM's financials).

The paper also floats the idea that Australia's existing Universal Service Obligation (USO) funding arrangements – which are collected as a carrier license fee levy – could be extended to cover the national broadband network subsidies.

The cash-strapped federal government has also decided there's a saving to be had by eliminating the use of the definite article, so it's dropped the “the” from references where “the NBN” would normally be used. It's also obtained an underground copy of The Guardian's style guide and refers to the project as Nbn, putting it at odds with the company building the network, who'd rather be known as nbn^TM. ®