Key takeaways
In what’s been a busy month for telecommunications, the Government has just released its much anticipated Discussion Paper Better delivery of universal services. The Government has called for submissions on the Discussion Paper by 1 March 2024 (Consultation).
Currently, Telstra as the statutory universal service provider is required to supply fixed voice services and payphones to people nationally on reasonable request and nbn is the default wholesale provider of broadband services nationally under the Statutory Infrastructure Provider (SIP) regime. The Government has signalled that it will take a conservative approach to USO reform. The Government will need solid evidence that alternative technologies (i.e. something other than fixed lines) can deliver an acceptable level of service to make them suitable substitutes before it makes changes to the USO.
While the Government has noted that there are emerging opportunities to use new or alternative technologies to deliver universal services, they also flag stakeholder concerns regarding the quality, reliability, redundancy and likely cost of alternatives, as well as the cost of maintaining Telstra’s ageing copper network in rural and regional Australia.
In this alert we set out some of the key issues we think the Consultation needs to consider and the next steps for you to have your say.
Key issues
To make persuasive submissions to Government for reform of the USO, organisations will need to include clear evidence and data on the suitability of emerging technologies. The Department intends to undertake technical trials on the performance of alternative technologies in parallel with this Consultation. Accordingly, stakeholders should also consider how they can participate in the trials given Government’s interest in gathering quantitative data on matters impacting the availability, accessibility, quality and reliability of alternative platforms, including how technologies and services are impacted by location, weather, climate, topography, equipment types and power needs.
While the list of key questions for stakeholders in the Discussion Paper is fairly general, we think the following issues will be important to Government:
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The declining number of USO services Telstra provides on its legacy networks
While Telstra provides the majority of USO services over the NBN using nbn’s fixed line technology, Telstra delivers USO voice services over copper and other legacy networks in rural and remote areas. The Consultation notes the declining number of USO voice services Telstra provides on its legacy networks is currently around 300,000 in September 2023 (down from approx. 600,000 in September 2018). These services are mostly provided using Telstra’s copper network, but also radio, mobile and satellite technologies (there are approximately 15,000 of these services). |
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Are LEOSats and mobile services a viable alternative?
Can the deployment of LEOSats be demonstrated (through the trials and evidence of real world performance) to deliver an acceptable baseline level of service to enable rural and remote consumers to rely on these services? LEOSats are available to close to 100% of premises and while mobile coverage is not uniform, many rural and remote consumers have the option of accessing mobile voice and data services from one of the MNOs. The Consultation notes that there are reportedly around 130,000 Starlink subscribers nationwide and Telstra’s recent announcement to offer bundled voice and broadband services over Starlink from late 2023. Other LEOSat platforms likely to be available in coming years include OneWeb and Amazon’s Kuiper network. |
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Do technical limitations continue to mean that satellite wholesale broadband services supplied by SIPs do not need to be capable of supporting voice?
This requirement does not currently apply to nbn’s satellite network, for example, due to technical limitations such as higher latency. |
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Will the nbn continue to be part of the solution outside the fixed line footprint?
The Government is evidently keen on seeing a return on investment on the recently announced $480 million upgrade of nbn’s fixed wireless and satellite services which is rolling out 4G and 5G technology to expand fixed wireless coverage from the existing towers. This program aims to move 120,000 services to nbn fixed wireless from its Sky Muster satellite by the end of 2024. |
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What should be the future of the copper continuity obligation given the significant costs of maintaining copper?
This obligation requires Telstra to maintain copper services to supply fixed voice services outside the nbn fixed line footprint that were in operation on 1 July 2012. The Consultation notes concerns regarding the deterioration of copper, the ongoing practicalities of maintaining the copper network and including lack of availability of equipment to maintain the network. |
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What should be the future of USO payphones?
The future of USO payphones also needs to be considered in disaster-prone areas where Telstra is boosting the resilience of these payphones and providing Wi-Fi services. |
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If there are significant changes proposed to universal services, what regulatory requirements are appropriate?
Will the existing regulatory obligations be imposed on other providers? For example, being a universal service provider (which can be imposed on multiple providers), Customer Service Guarantee, possible changes to the SIP regime and specific carrier licence obligations imposed on Telstra (relating to priority assistance and the network reliability framework requirements) and reporting obligations for voice services outside the nbn fixed line footprint. The Consultation notes the disparate way these regulatory obligations are applied through various regulatory mechanisms. While this is not mentioned specifically in the Consultation, is there the potential for this existing regulation to be consolidated and streamlined? If there are significant changes to universal services, the CSG’s ongoing suitability will also need to be considered. |
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As part of these potential regulatory changes, the Department is likely to consider if the provision of universal services should be subject to some form of price control.
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Next steps
The Government has clarified that it will take a staged approach to consultation and that this will occur in parallel with undertaking technical trials to get evidence on the performance of potential alternative technologies. Later stages of consultation are likely to focus on aspects like regulatory safeguards if potential changes are seen as viable options from the early stages.
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Key steps of consultation
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Timeframe
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Example
uses 2
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Initial consultation
Key elements of a modern universal service framework |
1 March 2024
Closing timeframe for submissions |
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Early feedback on technical trials
Feedback is welcomed by the Department on:
as part of setting up technical trials of alternative technologies. |
End of 2023
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Regional Telecommunications Review (RTR)
Government to establish an Independent Committee to provide advice and input to support Government consideration of universal services |
During 2024
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Technical trials of alternative technologies
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From early 2024
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Consultation on funding and Regional Broadband Scheme (RBS)
Consultation on funding arrangements that underpin delivery of universal services, incorporating the RBS review |
February - April 2024
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Summary report
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July 2024
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Further information on the consultation process will be placed on the Department’s website. Stakeholders are encouraged to reach out if they would like to meet with the Department by emailing email the inquiry team at usb@infrastructure.gov.au to express an interest in contributing to the inquiry.
Similarly, the Department has welcomed early feedback from stakeholders by the end of 2023 if stakeholders have views on service characteristics that should be assessed, or other issues that should be considered as part of setting up technical trials of alternative technologies (e.g. for LEOSat and mobile technologies).
We’d love to talk to you about what the Consultation Paper could mean for your business and how you would like to see the technical trials of alternative technologies evolve – please get in touch.
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