The charge - which would effectively be a tax on telcos that challenge NBN Co's monopoly - would come alongside the company's decision to increase construction spending to tackle TPG Telecom's plans for a rival network.

The current NBN plan relies on high revenues generated by densely populated urban areas paying for construction in the bush. But TPG's plan to connect 500,000 premises to a competing network using its own infrastructure threatens to damage NBN Co's profitability.

''If there's infrastructure competition that comes in to cherry-pick within these premium areas, the cost overall of building the network goes up,'' Mr Morrow said.

''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.

''That way everybody gets a broadband connection and there's a degree of competition. This is something we hope the Vertigan panel considers in the deliberations.''

The government-appointed Vertigan committee, led by former Victorian Treasury official Michael Vertigan, is considering whether companies such as TPG should be allowed to use a legal loophole to extend their networks and offer fibre-to-the-basement services in competition with NBN Co.

''There can also be a tax subsidy component, where taxpayers are paying for the difference of the higher cost in the rural areas,'' Mr Morrow said. He was reluctant to call the proposal a tax and said he preferred to think of it as a levy or a universal service obligation.

But iiNet chief regulatory officer Steve Dalby said the proposal would be difficult to enforce and should not be compared with the USO, which takes a percentage of revenue from all Australian telecoms providers.

''We would certainly be uncomfortable with being taxed twice and … if I'm going to bring FTTB to one site where TPG connects 100 … how is a levy across my total revenue pool going to be equitable?

''I'd like to see much more detail but just comparing it to the existing USO doesn't work.''

Despite concern over TPG's construction plans, NBN Co continues to roll out its fibre-optic network, with 512,659 fixed-line and fixed-wireless premises passed by the network as of March 31 - up 96,000 from the previous quarter.

Mr Morrow made the comments as part of NBN Co's third-quarter results, which revealed a $1.12 billion loss with revenue of just $69.8 million during the nine months to March 31. It has so far spent $4.4 billion in capital costs and $2.2 billion in operating costs.