27 August 2019

Department of Commerce seeks input on $60m Regional Connectivity Program

This article was written by Jessica Kruger.

The Department of Communications and the Arts (Department) has issued its Regional Connectivity Program Discussion Paper seeking input on the delivery of up to $60m funding for projects that improve digital connectivity in regional Australia (Program).   

The objective of the Program is to use a ‘place-based’ approach to target investment to provide economic opportunities and enable full participation in the digital economies for regional communities and businesses in particular locations, such as “high value” agricultural, tourism and resource sector locations.  Under the Program, the Commonwealth Government will fund up to 50% of the eligible project costs and applicants will fund the remaining costs (either alone of through a third party).

Stakeholders are being asked to help design the Program by making a submission to the Department, including by answering 13 questions that have been raised by the Department. Submissions are due at 5pm (AEST) 9 September 2019.  Stakeholders who are interested in seeking funding should consider making a submission to shape the way funding is allocated under the Program.

Topic highlights are:

1.   The Program is about funding bespoke ‘place-based’ solutions, which gives applicants more flexibility to get creative and propose projects that are tailored to the particular requirement in each region (either alone or as part of a consortium).  The proposed assessment criteria include economic benefit, social benefit, project delivery, financial co-contributions and overall value for money.  These are broad concepts, and if the proposed projects are bespoke, having an objective assessment criteria to compare projects that are not ‘like-for-like’ and allocate funding is important.  For example, how does the Department expect to compare the economic and social benefit of a co-funded IoT solution for agri offered by a consortium and free wi-fi in a rural indigenous community?

Applicants may want to take the opportunity to clarify the definition of the assessment criteria and the weighting given to each criterion.  This is consistent with the Mobile Black Spots Program, which allocated points to each proposed tower based on known criteria, and in Round 5 had a specific formula to calculate the cost to the Commonwealth per KM of handheld coverage.   

2.   Applicants must be a licensed carrier under the Telecommunications Act 1997.  If a consortium is applying, the lead applicant must be a carrier.  This is different to the eligibility criteria for the Mobile Black Spots Program, which allowed carriers and other telco infrastructure providers to apply for funding.  Non-carriers (eg Governments or infrastructure providers or organisations that rely on a carrier licence exemption) should consider how this would impact their approach to projects, and whether they support the requirement that applications be limited to licensed carriers.  

3.   Applicants are required to work with Governments and communities to provide evidence that the applicant’s proposed project is a priority for the local area.  The meaning of ‘local priority’ is broad and includes ‘economic and/or social and/or public safety benefits’.   This requires Governments to have considered a place-based analyses of local telecommunication needs in the area.  To make the most of the co-investment opportunities, Governments should focus on identifying local needs that applicants can work to address.  Applicants that are non-government, should start consulting with Government on the local priorities and available co-contributions as these will need to be documented in funding agreements as part of the application.

4.   There are limitations on funding offered by the Department:

  • funding is only for capital expenditure and not operating expenditure.  For satellite backhaul, ‘capitalised net present value’ of the cost can be included in the cost
  • funding is only for projects in areas that are outside NBN Co’s fixed-line footprint and in areas with a population of less than 100,000
  • funding is not to be used to over-build like-for-like infrastructure
  • funding is only for projects that are not already planned to be invested in commercially

5.   The Program includes examples of types of projects that would be considered for funding.  There is focus on providing additional transmission, including using satellite backhaul and IoT solutions for farmers.   The Regional Telecommunications Review in 2018 suggested that future solutions like 5G, Low Earth Orbit Satellites and broadband over powerlines could, in time, be accommodated by the Program.  Applicants have an opportunity to suggest other types of projects that could be funded through the Program that benefit the community.  

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