Productivity Commission to conduct USO inquiry


news The Federal Government has asked the Productivity Commission to conduct an inquiry into the telecoms industry’s Universal Service Obligation (USO) that will examine the “role and relevance” of the arrangements in today’s changing market.

The USO is a regulated safeguard that ensures access to standard telephone services and payphones “on reasonable request” to all Australians.

According to a joint statement from the Treasurer Scott Morrison, Minister for Communications Mitch Fifield and Minister for Regional Communications Fiona Nash, the USO has “supported social and economic participation”, including in areas where telephone services might not otherwise have been provided for commercial reasons.

However, with recent technological advances and shifting market structures, including the arrival of the NBN and the growth of broadband services, demand for current USO services has reduced – a trend that looks set to continue.

The Productivity Commission inquiry will examine Australia’s shifting telecommunications landscape to determine to what extent government should support universal access to a base level of telecoms services and, if so, what such policies should be.

The inquiry, which will involve public consultation, was first announced in the government’s response to the 2015 Regional Telecommunications Review, which was tabled in Parliament in February 2016.

In conducting the inquiry, the joint statement said, the Productivity Commission will consider the review’s findings and the government’s response, and must report to government within 12 months.

The terms of reference for the inquiry can be found on the Department of Communications and the Arts’ website.

This February, Vodafone CEO Inaki Berroeta spoke out on this subject, saying said Australian farmers and regional communities deserve better mobile coverage and choice.

He suggested the nation’s agriculture will never reach its potential to deliver innovation, jobs and growth for regional communities without telecoms reform to deliver more competition and more reliable telecommunications services.

“Agriculture is one of the areas where Machine to Machine (M2M) technology can make the biggest differences, but changes are needed to ensure farmers don’t miss out on the opportunity to take advantage of advances in technology,” Berroeta said.

“M2M can enable farmers to work smarter and faster, such as remotely monitor and adjust soil moisture levels, or receive live updates from the paddock on their tablets.“


  1. The USO should move from Copper to Wireless support ie. mobile phone.
    It would create more competition in rural and remote areas, Telstra just uses the USO as a cash cow as its not like services in the bush have improved at all since privatisation.

  2. Does provision of a mobile/satellite phone (at standard fixed line rates) meet the USO?

    Does the current USO include broadband? (nothing I read seems to say it does)
    Would this review talk about including additional items or simply if the existing system should stay?
    Given the current MTM policy what level of minimum USO for broadband could even be considered?

    Reading the terms of reference for the commission is a little confusing, they talk about the USO not being relevant because of NBN but wouldn’t the removal of the USO remove the obligation to put *anything* in some locations and simply move the onus onto the consumer to cough up for whatever service they want (or even have access to)?
    ie the local payphone (or landline) goes down and no one bother to fix it because it’s not financially viable?

      • Ummm. Well, you do/did/do need a telephone handset, certainly, as a bare minimum of HID. But I read the references given as including a reliable conduit between the handset and the rest of the world.

        Of course, this could be a piece of string… Or a loud-hailer? But not just the HID.

        • “Of course, this could be a piece of string… Or a loud-hailer? But not just the HID.”

          Of course. Perhaps I should have added “at the premises”. Anyhoo, the links are there for a greater understanding. Obviously there’s some sort of service attached to the handset, but the USO doesn’t mandate that the service has to be of any particular type. It’s at Telstra’s discretion.

          It’s this situation where how it came about where some people in Camberwell IIRC (it made the news, but I can’t find the article, my Google-fu might be off) couldn’t get broadband at all, and Telstra installed a wireless handset service.

  3. While they are at it, perhaps they can also do the CBA Mal promised us they (not Ergas & Co) would do, on his shitty FTTN network?

      • C’mom Murdoch…

        At least Richard posted a legit link to The Australian

        Oh wait.

        But even more comical, an article by Mark Gregory is Dick’s smoking gun…

        Yes the very same Mark Gregory who we all know is very knowledgable in relation to comms, BUT… Dick the font of all knowledge (just ask Dick, he’ll tell you) normally derides as clueless.

        Oh it just get’s better with this rabble of goons…

        Seems our resident L(l)ibertarian is getting as anxious as the others here, with the polls being so close…

        *Sigh nay guffaw* at the mindless 24/7 servility…

        • Gregory has been spot on re USO and the Tech Choice Program (acknowledge in comments at bizspec; now retired).

          His failures on tech legendary (traffic classes, comparative cost, opex, traffic classes, etc). But you wouldn’t understand any of our discussions (then neither does he).

          Continue posting your bile (like many nothing to contribute)…

          • Oh I see he’s spot on, when and only when, he agrees with Richard…

            Gee’s why shouldn’t we have realised this? It’s so obvious *sigh*

            Continue posting your narcissistic rubbish (nothing to contribute)… well nothing apart from a plan which has blown out from $29.5B to as much as $70B+ according to Joe, which is already some 4 years behind schedule… of course

            *slow clap*

  4. People saying USO doesn’t underpin rural broadband, I wouldn’t be so sure. Without the USO and associated subsidies will it still be viable for Telstra to maintain ADSL to parts of the bush? I suspect not. We”ll end up with a choice of Telstra mobile internet or nbn satellite.

    Yes the USO is directed at voice services however the maintenance of those voice services allows us to also have ADSL, even if it is not mandated.

    • Graham, voice services on copper lines will only give you 56 kbps. That’s ye olde tone modem speeds. Anything above that is not guaranteed, and your line qualifies as a working line under the USO.

      I’m not sure you can call 56 kbps at a minimum as ADSL. It MIGHT allow you to have ADSL, but if it doesn’t, then as far as the USO is concerned, there’s no issue.

  5. Murdoch the point is it acts as a subsidy for Telstra to maintain these lines. There are many lines in the bush that won’t carry ADSL but also lots that will. When deciding whether to maintain lines to ADSL quality Telstra has a USO subsidy to help balance the costs and benefits. I am capable of rational understanding so tell me how this not the case?

    Personally I doubt if my own high quality ADSL2 line would be continued at all without the USO. I live in a town with about 100 houses, but the DSLAM at the exchange already has 272 ports full, servicing the town as well as surrounding neighbourhoods. I suppose I can just hope that situation remains economic even without the USO but personally I would be worrying about Telstra just seeing the removal of copper here as an opportunity to gain mobile internet revenue and shut out all the competitors offering offnet ADSL through their gear.

    • ” When deciding whether to maintain lines to ADSL quality Telstra has a USO subsidy to help balance the costs and benefits. I am capable of rational understanding so tell me how this not the case?”

      It’s quite simple Graham. I didn’t mean to sound condescending, so apologies if you took it that way.

      Telstra doesn’t balance up the costs and benefits at all if your line meets the USO. That is, voice quality calls. They do not guarantee under the USO anything else.

      Above and beyond the USO, it’s a crap shoot. My point was, that the USO has no guarantee of broadband at all, just voice services only. If a line is capable of ADSL, then that’s fine. If however, for some reason, you find your ADSL deteriorating, then Telstra is not obligated under the USO to do anything as long as you can still make voice calls.

      “personally I would be worrying about Telstra just seeing the removal of copper here as an opportunity to gain mobile internet revenue and shut out all the competitors offering offnet ADSL through their gear.”

      Absolutely. Telstra’s history is littered with examples such as this. I wouldn’t trust them as far as I could bowl them.

  6. “Vodafone has long advocated for USO reform because we think it’s an enormous missed opportunity that $253 million is spent every year to maintain an antiquated copper network in regional areas which will be connected to the NBN,” Vodafone chief strategy officer Dan Lloyd said.”

    This $253 million is surely a big reason why rural ADSL can stay viable for Telstra. Our ‘connection’ to the NBN will be strictly via satellite. Our only other alternative is Telstra -only mobile internet

    I have been bracing myself for a few years now for a massive downgrade in Internet quality due to the new NBN arrangements, unless some ongoing deal protects all copper unttil such time as it is replaced by fibre.

    As far as I can see this inquiry, like Vodafone’s remarks, is directed squarely at undermining any such presumption.

    • If you have ADSL to a local exchange then there is a fibre lead in to the exchange. There is no technical reason why you should have a downgrade in performance moving to NBN services. There might be political / economic ones, where it is cheaper to throw a couple of hundred residents onto satellite rather than send crews out to regional Australia to run fibre or install nodes with new copper, but to be honest if it’s a choice between FTTN and satellite I’d take satellite – at least that way you might get upgraded to FTTP at some point. Well, unless they rip out that backhaul fibre… But you’re right, anything other than FTTP could lead to a downgrade in performance, which is ludicrous.

  7. Telstra don’t even find it economic to invest in a second DSLAM once the first fills up so the economic realities may leave us waiting a long time indeed for any improvement from Satellite NBN. I believe a fibre node is a $300,000 piece of equioment. If you add the costs of the fibre runs and end point equipment the private sector are unlikely to ever cater for a town of 100 or so houses without something like a USO for broadband. All we would ask for in our town, if anyone was asking, is to keep our ADSL as the primary internet solution until such time as something better than satellite can replace it.

    The satellite is a downgrade for just as many living here as it is an upgrade for others.

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