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A rural internet service provider is facing a growing backlash over a proposed plan to sell its service to local authorities.
The Government is set to introduce legislation to allow the sale of broadband services from small and medium-sized businesses to people on low and moderate incomes, after being urged to do so by the Business Council of Australia.
In a letter to the Federal Government last month, the group warned that if the proposal is passed, the cost of access to the internet would rise significantly, and that businesses would be left “lacking in the digital age”.
The proposed policy would allow small businesses to receive access to broadband services for a fee of up to $200 per month, which would be deducted from their income.
The Business Council says that such a plan would harm the country’s rural economy, and it has launched a campaign calling for a moratorium on the sale to the small and marginalised.
The proposal to sell broadband services to rural residents came after the Government announced the launch of the national broadband network.
Under the plan, internet service providers (ISPs) would be required to sell to “a minimum of 10 per cent of their total premises” to be eligible for a grant of funding.
In other words, for every business with 100 premises, it would be eligible to receive a $20 grant.
The group said that the move was “unnecessary, unbalanced and unbalanced for the majority of rural Australians”.
The group also said that if businesses were required to offer the services to their customers, they would “not be able to provide high-quality broadband service” and said it would “encourage rural businesses to sell their own broadband to the public”.
Rural broadband services could be sold under the proposed policy, but only if the Government were to introduce laws to make it compulsory.
The BCA has criticised the proposal as “disproportionate” and a “slap in the face” for rural communities.
“This will not improve the quality of broadband, but will cause many small and mid-sized enterprises to find it more expensive to provide their services,” the group wrote.
“It will also create more debt for the Australian Government, who will have to foot the bill for the increased cost of providing the service to its small and disadvantaged communities.”
The organisation also said the proposal “will only further entrench and reinforce the entrenched power of the internet service companies, who are already the dominant providers of internet access across Australia”.
“In other words it will result in the same sort of broadband inequities and high prices that already exist in rural areas,” the organisation said.
In the letter, the BCA noted that the proposal could lead to “disparate and unequal access to services for the very poorest, and will exacerbate the problems of high broadband prices”.
The BSA, the National Broadband Network (NBN) and Rural Broadband Networks Alliance (RBNA) all support the sale.
“The Government should listen to the voice of small business, and instead of pushing for a one-size-fits-all approach to delivering broadband to everyone, we need to ensure that rural communities are included in the market, and are not left out in the cold,” Rural Broadcast Networks Association chief executive Matt Williams said.
“With a national broadband plan that is designed to deliver a fast and affordable high-speed broadband network, the Government must listen to rural voices, and ensure that the Government is acting in the best interests of small and middle-income Australians.”
The Australian Competition and Consumer Commission (ACCC) said it was reviewing the proposal, which it will now review further.
“ACCC is taking the position that it is inappropriate for the Government to sell services in areas where rural broadband is already available, and we will ensure that it doesn’t,” ACCC chair Rod Sims said.
The NBN Co said it supported the idea of selling broadband to rural communities, but said that would be limited to small businesses.
“We don’t believe it will have a significant impact on the broadband industry as a whole, and as a result we believe it should be considered in isolation from other broadband options for small and moderate-income communities,” a spokesperson said.