Universal Service Obligation (USO) and the NBN

A long standing feature of Australian telecommunications is the “Universal Service Obligation” or USO. Simply put, it means all Australians should have “reasonable access” to a standard telephone service, payphone, emergency call service and the National Relay Service (telephone call assistance for people with disabilities), regardless of where they live or conduct business. Previously Telstra was responsible for the USO implementation, however with the NBN roll out this has changed.

This report outlines the previous USO and the new NBN era USO arrangements.

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Background

Left to market forces, subscribers in remote areas would have very limited access telecommunications services. The cost to service remote subscribers far outweighs the revenue they generate. To address this issue, the Telecommunications (Consumer Protection and Service Standards) Act 1999 outlines the Universal Service Obligation, which ensures equitable access to basic telephone services.

Of course there is a cost for this. Telstra is the Primary USO provider, the yearly cost to Telstra for USO provision is determined by the Australian Communications and Media Authority (ACMA). Telstra bears some of this cost, the rest by the other carriers in proportion to their respective market shares. The ACMA administers the collection of USO levies.

The USO levy adds to carrier operating costs, which hence adds to retail service prices. The net effect is that all subscribers share the cost of providing basic telephone services to remote users, rather than just the remote users themselves.

Telstra published a “Standard Marketing Plan” or SMP, which detailed their USO undertakings. These included timeframes for service connection and repairs, and specifications for standard telephone and payphone services.

The standard telephone service features include:

  • untimed local calls
  • access to emergency call services
  • itemized billing
  • calling line identification

The Telstra SMP also detailed handset enhancements for people with disabilities and priority telephone services for people with life threatening medical conditions.

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