Taxpayers, ISPs could subsidise rural NBN: NBN Co CEO

Taxpayers or companies building their own fibre infrastructure in the city could subsidise the cost of building the NBN in rural Australia, new NBN Co CEO Bill Morrow has suggested.

The existing NBN plan relies on generating high revenue in densely populated urban areas to help pay for construction in rural areas.

But companies building their own fibre infrastructure in urban areas to capitalise on the revenue opportunities there are jeopardising the overall NBN plan, according to Morrow.

“If there’s infrastructure competition that comes in to cherrypick within these premium areas the cost overall of building the network goes up,” Fairfax quoted Morrow as saying.

To rectify this, Morrow suggested either the companies doing these rival build outs, or the taxpayer, could pick up the slack.

“So if, for example, there’s a company like TPG going into a certain area, they can do whatever cost model they can come up with but there [could be] a levy much in the same way [Universal Service Obligations] currently works ... to partly offset the costs of getting broadband to the rural areas,” Morrow reportedly said.

“There can also be a tax-subsidy component where taxpayers are paying for the difference of the higher cost in the rural areas.”

“That way everybody gets a broadband connection and there’s a degree of competition.”

Morrow reportedly indicated that NBN Co would make a submission on the subject of cross subsidies to the Vertigan review.