Australia to swap USO for USG by 2020 once NBN is finished – oh …

australia USO USG NBN OMG
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ITEM: The Australian government said on Wednesday it plans to scrap its Universal Service Obligation (USO) program by 2020 and replace it with a Universal Service Guarantee (USG) – provided the NBN is finished by then, and provided it’s cheaper to implement than the USO.

That announcement follows a report from the Productivity Commission in June that concluded the USO – is “anachronistic and costly” to the tune of around A$100 million ($80.6 million) per year, with another A$200 million being paid by telcos via a levy. The report said the government is spending approximately A$1 billion a year on universal telecoms – and that doesn’t include the national broadband network (NBN).

The Productivity Commission report recommended the government wrap up the USO by 2020, as by that time the NBN should cover 100% of the population, and mobile broadband will be available to 99%.

According to ZDnet, Communications Minister Mitch Fifield said the government will adopt the USG – which mandates access to voice and broadband communications services – provided four conditions are met:

The completion of the NBN in 2020, which will provide broadband to 100 percent of the population; voice services being available at 100 percent of premises if requested; new universal service delivery arrangements being more cost effective than the current USO contract with Telstra; and new consumer safeguards being developed and implemented after public consultation.

Broadband services will continue to be provided via the current USO contract with Telstra until the NBN rollout is complete. (Under the contract, Telstra is responsible for using USO funds to install and maintain fixed-line services.)

The government’s official response to the Productivity Commission report said it would look at developing options for implementing the USG, ZDnet reports:

… the government will examine the feasibility and cost implications of issues including: 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; the potential impact on NBN Co’s costs and network design as premises currently served by Telstra under the USO migrate to NBN infrastructure; [and] where and when it may be appropriate for Telstra to reduce the number of existing payphones provided under the USO …

Dan Lloyd, chief strategy officer for Vodafone Hutchison Australia – which has been complaining about the USO for years – said in a statement the cellco was pleased that the government is “finally handing a death sentence to the outdated and anti-competitive USO”, but added it would be even better if the USO was killed sooner than 2020 – preferably immediately:

… Every day that the current USO continues is a day that regional Australia misses out. We will be working with government to identify options for action before 2020.

We are very concerned that Telstra will continue to receive nearly $1 million per day for another three years.

There’s also the possibility that it could be longer than three years, given the government’s four preconditions for launching the USG. There’s no guarantee (so to speak) that all four will be sorted by 2020, and the NBN is already over budget and behind its original rollout schedule (it was originally supposed to be completed this year).

NBN Co has promised its rollout is now on track and will be finished by 2020, but – as they say – stuff happens. And if customer complaints are anything to go by, just because your home can access the NBN doesn’t automatically guarantee you can get an actual broadband service on it. Presumably the government’s plans to think up options for USG implementation will take that into account?

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