Broadband And The Universal Service Obligation

Broadband And The Universal Service Obligation

Earlier this month, Australia’s Productivity Commission weighed in on the very important topic of broadband access for all.

In June this year, we mentioned a Productivity Commission inquiry would investigate what sort of changes should be made to Australia’s Telecommunications Universal Service Obligation (TUSO), which currently only covers standard telephone services. It would also consider recommending dumping it altogether, with view to replacing it with something else.

Broadband Access In Australia

A draft report recently released by the Commission indicates the TUSO is well past its use-by date.

“‘In a digital age, the current obligation — requiring Telstra to provide all Australians with access to basic fixed line telephones and payphones — is anachronistic and needs to change,’ said Commissioner Paul Lindwall.

So much has happened in the years between 2005-2015 in relation to telecommunications in Australia. Fixed voice calls have plummeted 79%, 29% of Australian adults have a mobile service but no fixed phone and there’s been more than 50% annual growth in internet data traffic.

The report recognises that internet access is becoming increasingly integral to the everyday life of most Australians.

In its report, the Commission has proposed the TUSO be replaced with a universal service policy objective to provide baseline or minimum broadband services to all premises in Australia – and this policy would include voice services. It has recommended this comes into force when the NBN is fully rolled out.

While it states telecommunication services are likely to continue to be affordable for most people, the report also recommends that government subsidies may be required for a small number of low-income users, and that these subsidies should be developed under an “optimal” funding model. It also believes small programs do not justify the costs associated with a broad-based industry levy.

“The narrowly targeted scope and small scale of the programs under the Commission’s proposals tips the balance towards funding from general government revenue as opposed to an industry levy.”

The full Productivity Commission, Telecommunications Universal Service Obligation, Draft Report can be viewed here (PDF).

The Commission will present its final report to the Government in April next year. Prior to that occurring, public hearings will be held in January and February.

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