Free market failure: Call for government to fund better regional comms

Review calls for changes to NBN Co Technology Choice program, massive government co-investment package

A government-commissioned review of the state of telecommunications in regional Australia has concluded that maximising economic opportunities in remote parts of the nation will require investing hundreds of millions of dollars in building new infrastructure.

The review panel found that “there is little to no free market drivers to stimulate the change required in the telecommunications industry’s capital focus”.

“In our view, co-investment is the only way that these infrastructure improvements will be possible at the scale that is required,” the 2018 Regional Telecommunications Review states.

“Co-investment with industry, interested state, territory and local governments, as well as businesses, will be critical for this project to succeed and should be a key feature of the program design.”

The federal mobile blackspot program has employed a co-investment model.

The review called on Canberra to commit to a “large scale, multi-year” Stronger Regional Connectivity package that would focus on improving broadband and mobile services in “areas of high economic, social and public safety significance” — particularly those areas covered by NBN Co’s Sky Muster satellite service.

“The timing for this new investment is right now, we shouldn’t just wait for the next technology ‘silver bullet’ to come along,” the report stated. “If we do nothing in the short-term then the current inequities faced by many regional, rural and remote Australians will simply get worse.”

Another major recommendation was that NBN Co’s Technology Choice Program be revamped. The program allows individual households or communities to fund a switch in NBN technology.

The current model “is not an attractive option for governments or businesses that are considering co-investment,” the review stated.

“Under NBN Co’s current Technology Choice model, the company appears to charge the applicant the full incremental costs of the technology upgrade where an existing NBN service, such as satellite, is already available in the area,” the report said.

“Given NBN Co’s commitments to upgrading its regional networks, it makes sense to move to a co-investment model that could harness other sources of funding to bring forward scheduled upgrades or to enable unscheduled upgrades in areas that are a priority for the co-investors. Co-investment is a well-established feature of many programs that are designed to improve digital connectivity, whether at the Commonwealth or state level.”

The review called on the government to make NBN Co adjust the area switch element of its

Technology Choice Program “so that it can be a financial co-contributor with other interested parties.”

Other recommendations contained in the review related to consumer protection, digital inclusion.

It is reassuring to see that the Independent Committee has listened to the voices of country Australia as they’ve spelled out what they need from a modern telco service,” said the CEO of the Australian Communications Consumer Action Network, Teresa Corbin.

“We hope that the Government will implement these recommendations in a timely manner to help protect communications consumers across the regions.”

“Telecommunications touches every aspect of life for those living in regional, rural and remote Australia,” said regional services minister Senator Bridget McKenzie. “This report is a vital check-up on the health of regional communications. Now more than ever it is critical that we get connectivity right in our regions.”

The government said it would respond to the report in early 2019.

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