fixed wireless and billion (net have a cost a subsidy, with noncommercial satellite services. present value). advantage. costs likely to be services. greater than $110 There could be per month. As broader costs will still be distortions, such incurred, this as investment implies inefficient decisions to avoid use of the paying the network. proposed charge (for example by favouring alternative technologies). nbn would face This may reduce This may reduce This may While nbn would Economic efficiency: incentives for cost constraints cost constraints somewhat reduce face incentives cost and service on nbn, and lead on nbn, and lead cost constraints for cost and Dynamic / Productive efficiency over to service quality to service quality on nbn, by service efficiency time based on the decisions that are decisions that are loosening the over time until efficiency regulatory inefficient inefficient price cap the funding arrangement, because nbn because nbn arrangements. arrangement shareholder not itself bear the would not itself This would be commences, once (Government) costs. bear the costs. expected to be arrangements are pressure and The impact would minimal given the in place it may debt market be small if most small amount of reduce cost pressure. of the revenue revenue constraints on from the charge recovered from nbn, and lead to was from nbn (i.e. fixed wireless and service quality a charge whereby satellite services. decisions that are nbn and nbn inefficient comparable, but because nbn not mobile would not itself broadband, were bear the costs. captured). End users of nbn Taxpayers would End in Users in When Equity services in fund fixed areas noncommercial implemented, commercial areas wireless and would be areas would be end users of nbn would be satellite services. subsidising responsible for services in subsidising This would mean commercial areas, funding their own areas noncommercial that there would regardless of the services except in would be areas, regardless be subsidies for income and cases of hardship. subsidising of the income high income hardship levels of noncommercial Take-up of and hardship people in either user. areas, regardless services would be levels of either commercial areas. of the income and very low in the user. End users of hardship levels of absence of a other fixed line either user. End subsidy, with services would users of other prices higher than not contribute to fixed line services the costs of would not
fixed wireless and satellite services. billion (net present value). have a cost advantage. There could be broader distortions, such as investment decisions to avoid paying the proposed charge (for example by favouring alternative technologies). a subsidy, with costs likely to be greater than $110 per month. As costs will still be incurred, this implies inefficient use of the network. noncommercial services. Economic efficiency: Dynamic / Productive efficiency nbn would face incentives for cost and service efficiency over time based on the regulatory arrangement, shareholder (Government) pressure and debt market pressure. This may reduce cost constraints on nbn, and lead to service quality decisions that are inefficient because nbn not itself bear the costs. This may reduce cost constraints on nbn, and lead to service quality decisions that are inefficient because nbn would not itself bear the costs. The impact would be small if most of the revenue from the charge was from nbn (i.e. a charge whereby nbn and nbn comparable, but not mobile broadband, were captured). This may somewhat reduce cost constraints on nbn, by loosening the price cap arrangements. This would be expected to be minimal given the small amount of revenue recovered from fixed wireless and satellite services. While nbn would face incentives for cost and service efficiency over time until the funding arrangement commences, once arrangements are in place it may reduce cost constraints on nbn, and lead to service quality decisions that are inefficient because nbn would not itself bear the costs. Equity End users of nbn services in commercial areas would be subsidising noncommercial areas, regardless of the income and hardship levels of either user. End users of other fixed line services would not contribute to the costs of Taxpayers would fund fixed wireless and satellite services. This would mean that there would be subsidies for high income people in areas. End in commercial areas would be subsidising areas, regardless of the income and hardship levels of either user. Users in noncommercial areas would be responsible for funding their own services except in cases of hardship. Take-up of services would be very low in the absence of a subsidy, with prices higher than When implemented, end users of nbn services in commercial areas would be subsidising noncommercial areas, regardless of the income and hardship levels of either user. End users of other fixed line services would not