USO and the NBN

Telstra has been default USO provider because they own most of the voice network infrastructure, particularly the copper access network (the local loop). The NBN changes this, as the Telstra copper network will be replaced progressively with the NBN Fibre to the Premises counterpart. However the NBN will not assume the Telstra USO provider role.

A key reason for this is the NBN mandate, that is, a provider of layer 2 services only. While the NBN is designed to support voice services, they will not be provided by NBN Co, but instead by third parties. The NBN provides basic voice capabilities in the customer premises device (the Network Terminal Unit or NTU), reserves the voice call data capacity but no more. More details on NBN voice service support is here

NBN Co is therefore not able to provide the voice, payphone, National Relay Service and other USO components, hence USO is not part of their mandate.

Telecommunications Universal Service Management Agency (TUSMA) – the new USO regime

The Australian Government has formed a new entity called Telecommunications Universal Service Management Agency (TUSMA), which assumed USO responsibilities, from June 2012 (www.tusma.gov.au). For 2012-13 and 2013-14, government funding for USO Co will be $50 million per annum, following that $100 million per annum. The increased funding from 2014 onwards reflects the wider rollout of the NBN, and hence the increased scope of USO Co operations as the Telstra copper network is gradually retired.

Any additional USO Co costs will be met by industry levies, similar to the current USO arrangement. While TUSMA will administer the new USO regime, it will sub contract third parties to deliver the USO services. Telstra will deliver the USO, under contract to TUSMA. Details of the Telstra contract with TUSMA are at www.tusma.gov.au/registers.

TUSMA is “responsible for entering into contracts, and making grants, to support the provision of public interest telecommunications services.” (Telecommunications Universal Service Management Agency Act 2012) In addition to USO provision, TUSMA will also assist migration of customers with voice only services from the Telstra Copper network to the NBN.

Summary

The Universal Services Obligation (USO) ensures basic telecommunications services for all Australians, particularly those in remote areas. While Telstra previously had responsibility for USO provision, this is longer so. Instead a new government entity called Telecommunications Universal Service Management Agency (TUSMA) assumed USO responsibilities from mid 2012.

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