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Positive updates to Australia’s Universal Service Obligation

Telstra News

Posted on December 7, 2016

3 min read

The Productivity Commission has just released a draft report on the future of Australia’s Universal Service Obligation (USO).

It’s an important issue for many customers, especially those in regional and remote areas, because at the moment the USO provides a guarantee that no matter where you live or work, you can get access to a telephone service.

To be clear, the Commission is not recommending getting rid of the consumer protections in the USO, it is advocating for alternative ways of providing them. Getting rid of the guarantees and protections customers have would not be in anyone’s best interest. The debate we need to have is what we can do to improve it.

We support many of the points raised by the Commission and, as we’ve said before, we remain open to reforming the USO if changes mean the experience it provides for customers can be improved.

The draft report sets out many important arguments for updating the USO. Most obviously, it looks at the future of broadband and how the services it can deliver are reshaping the Australian telecommunications landscape.

We support the idea that once the rollout of the nbn is completed, there’s a real opportunity to examine what technology is used to deliver a universal service that may replace the current USO (for example by using nbn’s fixed network, fixed wireless and satellite services).

In order to make sure that nbn can deliver a truly universal service whenever and wherever people need it, its network needs to be operating on a truly national basis and be capable of meeting customers’ expectations.

We also agree with the Commission’s view that the Government should consider whether the ongoing obligation to have traditional payphones available to the public is delivering the best value to Australian consumers and communities.

At the moment, Telstra has a contract with the Australian Government to deliver USO services, which guarantees that even in the most remote areas customers will have access to a service. The USO is paid for through a mix of government and industry funding. Telstra is the largest single contributor of funding to the USO (providing even more funding than the Government) with an annual contribution of around $140 million.

If the Government decides to change the USO in the future and move the obligation to the nbn, Telstra and other telcos may no longer need to contribute to its funding.

Changes to the USO could also mean we can reduce the costs we face in delivering a copper-based service in high-cost parts of the country and enable us to make more efficient technology choices in how we serve our customers.

The top priority for industry and government should be making sure we fully understand how changes to the USO could be made in a way that ensures people living in remote Australia get a better customer experience.

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