First hurdle for Gig State

'Gig State' hits federal government NBN tax hurdle

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Cobar is one town set to benefit from the state government's $100-million 'Gig State' initiative. The federal government's 'broadband tax', approved last week will apply to some areas covered by Gig State.

Cobar is one town set to benefit from the state government's $100-million 'Gig State' initiative. The federal government's 'broadband tax', approved last week will apply to some areas covered by Gig State.

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A bold $100-million committment by the state government to improve regional internet speeds may be hit with a federal government tax.

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Gig State, a bold state government initiative to improve broadband services into regional and remote areas of NSW may have hit a stumbling block.

The federal government last week resolved to put in place a tax on internet service providers of $7.10 per subscriber to non-NBN services, beginning in July.

The problem is the $100-million Gig State is not NBN affiliated and in fact will directly compete against the federal government's service.

At a total project cost of $100 million Gig State will lay fibre optic cables west as far as Cobar to bolster high-speed internet services.

Expressions of interest from internet service providers have been called for.

The Department of Planning, Industry and Environment is overseeing a two-stage tender process for the project, which will start initially in the target locations of Dubbo, Wagga Wagga, Parkes and a corridor west to Cobar. Fibre solution will also be created for residents in Sutton, Bywong and Wamboin.

Gig State will be delivered under the NSW government's $400-million Regional Digital Connectivity program, announced in 2019 to address the digital divide between metropolitan and regional areas.

It is part of the state government's commitment to deliver "transformative infrastructure" using the $4.2 billion Snowy Hydro Legacy Fund.

One problem facing Gig State, said a spokesman for federal Communications Minister Paul Fletcher, was the areas targeted through Gig State were in locations where NBN Co already has active fixed-line fibre-to-the-node and fibre-to-the-premises infrastructure.

"If a carrier serves any premises under the Gig State plan and meets the criteria for the RBS, the carrier will be liable to pay the RBS charge for those premises," the spokesperson said.

There are exemptions:

  • Any carrier with less than 2000 chargeable premises will be fully exempt.
  • Carriers that service greenfield premises, will have the 55,000 chargeable premises exempt until June 30 2025.
  • Other carriers will have 25,000 chargeable premises exempt until June 30 2025.
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