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Telcos call for end to "outdated" USO

AAP logoAAP 6/12/2016 Trevor Chappell

Telstra's competitors are urging the federal government to dump or amend a provision aimed at ensuring phone services are accessible to all Australians.

The Productivity Commission says the provision, called the Telecommunications Universal Service Obligation (TUSO), is outdated and should be replaced to reflect the rollout of the national broadband network.

The TUSO requires Telstra - as the chosen provider - to ensure standard telephone services and payphones are reasonably available to everyone wherever they live or work.

But in its draft report released on Tuesday, the Productivity Commission says the the TUSO remains focused on the delivery of fixed-voice handsets and voice calls over fixed-line copper connections.

Demand for those services is falling, and alternative technology could be more cost-effective.

Furthermore, says the commission, the TUSO stymies competition because Telstra is the only designated provider, even though the TUSO is partly funded by other telcos.

The commission also says the Australian government did not demand transparency and accountability from Telstra, and the basis for funding, which comes from both the industry and government, is unclear and disputed.

Telstra is not required to report on the number of non-commercial services or on the costs of any telephone service it supplies.

"In an age where basic pay phones and payphones are rapidly becoming outdated, the lack of transparency and accountability makes it difficult to justify from the point of view of those who contribute to its funding," the commission's draft report said.

"It also makes any assessment of the value of the TUSO to the broader community challenging.

"Even though universal access to a minimum level of telecommunications services remains important, the weight of evidence suggests that the TUSO is no longer fit for purpose."

The Competitive Carriers' Coalition (CCC), an industry association representing the interests of non-dominant telecommunications carriers in Australia, urged the government to take immediate action to dump the TUSO.

"It is a shocking indictment that Telstra keeps no records of the costs of services it supplies under the TUSO, or the number of services," CCC chairman Matt Healy said.

"Basically, Telstra gets a big, fat cheque from competitors every year, no questions asked, and no one can account for either how it is spent or why it is needed."

Vodafone said the commission's draft report was a damning indictment of the TUSO model.

"We urge the government to follow the commission's recommendation to immediately begin negotiations with Telstra to amend and end the standard telephone and payphone modules of the TUSO."

Telstra said on Tuesday that it will support changes to the TUSO if they improve the experience for customers in delivering a universal service.

Telstra supported the commission's view that the government should consider whether the ongoing payphone obligation was delivering the best value.

"Once the roll out of the NBN is completed, there's a real opportunity to examine how it can be used to deliver a universal service that may replace the current TUSO," Telstra said..

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