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New Universal Service Guarantee being developed in Australia to ensure access to voice and broadband services for all citizens

The Australian Government has announced a programme of work to implement a new Universal Service Guarantee (USG), which will ensure all Australians have access to voice and broadband services, regardless of where they live. This will be delivered on a commercial basis by the market in the first instance, and where this cannot be achieved, options will be developed for targeted Government measures.

The USG will be developed following the Productivity Commission inquiry into the Universal Service Obligation (USO). The USO was introduced in the 1990s to ensure ‘reasonable access’ to a standard telephone service and payphones for all Australians on an ‘equitable’ basis, regardless of where people reside or work. But the widespread availability and usage of mobile and broadband services has changed the scenario. The government is also rolling out the AU$49 billion National Broadband Network (NBN) to enable the provision of wholesale broadband services (with voice capability) to all premises (on request) within Australia.

The review was conducted in view of these developments to evaluate the utility of the USO and check if the significant taxpayer investment in TUSO is achieving value for money. It found that the USO is 'anachronistic and costly' and should be 'replaced by a new framework to reflect changing policy, market and technological realities'. The report said that the NBN and mobile networks will likely meet most requirements. Flexible, transparent approaches should be used to address remaining gaps.

The plans for the USG are a response to the report from the Productivity Commission (the Government’s response to the PC report can be accessed here).  

As part of the development of the new USG, the Government is committed to voice telephony services via the existing Universal Service Obligation (USO) contract with Telstra until this is replaced with a USG following the completion of the National Broadband Network rollout in 2020.

The Government will develop options to implement a USG which ensures all Australian premises have access to retail voice and broadband services delivered on a commercial basis, underpinned by the Statutory Infrastructure Provider (SIP) framework currently before Parliament.  

The new SIP obligations make NBN Co the default ‘infrastructure provider of last resort’. There will be a requirement on NBN Co to connect premises and supply wholesale broadband services on reasonable request. NBN Co will become the SIP for areas as it rolls out its network and it will be the default SIP for all of Australia after the NBN is declared built and fully operational. Other network providers can also be SIPs where appropriate, for example where they have contracts to service premises in a new real estate development.

Where necessary, options will be developed for targeted Government measures, for example, to deliver alternative voice services to premises in the NBN satellite footprint which don’t have mobile coverage.

The Government has also commenced work on cost and delivery options to provide for a future Universal Service Guarantee, and will consider the future allocation of the AU$100 million in annual funding it currently pays into the existing USO contract as part of any change to existing USO arrangements.

In developing options for implementing a future Universal Service Guarantee, the Government will examine the feasibility and cost implications of issues such as alternative means of providing voice services to premises in NBN Co’s satellite footprint, recognising that NBN Co’s satellites are designed for broadband not voice services and the potential impact on NBN Co’s costs and network design as premises currently served by Telstra under the USO migrate to NBN infrastructure.

Before any changes are made to the existing USO, the USG will need to meet the following requirements:

  1. broadband services are available to 100 per cent of Australian premises, on request, at the completion of the NBN rollout in 2020
  2. voice services are available to 100 per cent of Australian premises on request
  3. any proposed new service delivery arrangements are more cost effective than the existing USO contract (including any transitional costs)
  4. a new consumer safeguards framework is in place following a review and associated public consultation process.

Minister for Communications, Senator Mitch Fifield said, “The Government is taking a ‘belt and braces’ approach to protecting telecommunications accessibility for people in regional Australia. The Government is putting new, stronger safeguards in place before making any changes to existing safeguards while the NBN is rolled out.”

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