Govt to roll up Telstra’s copper network as NBN rolls out

Telstra's USO contract set to be ditched as NBN comes online

Farm Online News
The Universal Service Obligations is worth about $300 million a year and provides Telstra with about $100m in taxpayer funds to gaurantee fixed copper line voice services to all Australians.

The Universal Service Obligations is worth about $300 million a year and provides Telstra with about $100m in taxpayer funds to gaurantee fixed copper line voice services to all Australians.


USO valued at $300m for fixed line voice services set to be scrapped


AUSTRALIA’s Universal Service Obligation (USO) guaranteeing nationwide access to a fixed copper line telephone services is set to be scrapped by the federal government.

A market based solution, supplemented by targeted government intervention, will replace the $300 million a year USO contract with Telstra sometime after 2020 when the National Broadband Network (NBN) roll out is due to be completed.

The new policy, dubbed the Universal Service Guarantee, follows separate investigations by the Productivity Commission and National Audit Office that labelled the USO poor value for money which could be replaced by new technology such as mobile networks.

The commission found that the USO was redundant because 99 per cent of Australians are better served by their access to universal voice and data services over the NBN and/or mobile networks.

It recommended government encourage market competition and use targeted funding through programs such as the Mobile Black Spots Program, to eliminate coverage gaps.

A competitive tender for baseline voice services, using a any viable technology, could be employed to “address any gaps in voice services within the NBN satellite footprint”.

Setting out its Guarantee policy in its response the commission’s report, government said the “vast majority of mobile coverage” provides voice and mobile broadband connectivity which duplicates the fixed line networks and exceeds the current fixed line-requirements of the USO.

More than 99 per cent of Australians have access to at least one commercial mobile network, and more than 96pc can access three.

But turning off the USO tap will have most impact on rural and remote residents with patchy or no mobile coverage, who rely on voice based communications, and live outside the footprint of fixed line connections to the NBN.

This connection is a likely solution if the fixed line copper network is not maintained.

They access NBN through fixed wireless connections from Sky Muster satellites, which could potentially provide voice services through Voice over Internet Protocol (VoIP).

But questions remain over VoIP’s reliability.

Isolated Children’s Parents’ Association president federal president Wendy Hick said in June, in response to the Productivity Commission’s report, that VoIP was not reliable enough for emergency and business communications.

“A voice service over satellite internet could be the only alternative for these families and would be severely compromised by poor weather, power outages and latency issues,” she said.

The government response to the Productivity Commission report highlighted the requirement for guaranteed voice based telecommunications in the bush and said the reform was contingent on several requirements:

  • The completed NBN must provide access (on request) to broadband services for 100 per cent of Australian premises.  
  • Voice services be available to 100 per cent of Australian premises.
  • New service delivery arrangements are more cost effective than the existing USO
  • New consumer safeguards are in place

National Farmers Federation president Fiona Simson offered qualified support for the policy.

“We will need to consider the path forward for guaranteed voice services very carefully,” she said.

“The response indicates a heavy reliance on mobile services, something that we have been saying for a long time needs fixing in the bush.”

“It is imperative that, should the federal government move away from copper technology for voice services, the reliability of new alternative technologies are first proven beyond doubt.

“Voice services are literally a lifeline for many rural Australians..

USO provider Telstra said it delivers copper line connections to about 600,000 rural and remote homes, farms, businesses and indigenous communities that would not be commercially viable without the Universal Service Obligation.

The Productivity Commission estimated there are about 90,000 remote customers who live outside mobile services and rely on landlines.

The USO is a 20 year agreement, set to expire in 2031, which funds Telstra to provide access to and maintain the fixed-line copper network for universal voice services.


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