Give NBN more copper, says Optus

Telcos push for overhaul of Universal Service Obligation scheme

Vodafone and Optus have called for a thoroughgoing overhaul of the Universal Service Obligation scheme, which is designed to make sure that all Australians have access to a 'standard telephone service' (STS).

Telstra has argued the current model, under which it is contracted by the government to deliver the USO, is working well. However, Vodafone Australia's CEO, Iñaki Berroeta, has condemned it as a "costly and ineffective scheme".

"Through the NBN, taxpayers are spending billions of dollars funding the replacement of copper lines in regional areas, with fixed-wireless and satellite, for the delivery of internet services," the telco CEO argued in the foreword to a Vodafone commissioned report submitted to the government's inquiry into regional telecommunications.

"Yet in the same areas, taxpayers also help fund Telstra to maintain its copper wire network for fixed-line home phones despite the capability of fixed-wireless and satellite technologies to provide a high quality telephone service."

In remote areas where delivering voice services is otherwise uneconomical, Telstra is subsidised for the cost of providing an STS. The cost of delivering the USO is offset by an industry levy.

In its main submission (PDF) to the inquiry, Vodafone argued that the USO could be replaced by a scheme centred on the National Broadband Network, with NBN designated the 'Universal Infrastructure Provider' for Australians.

A new Universal Service Fund could potentially fund a broader range of communications solutions, including mobile coverage and public open access Wi-Fi.

In its submission, Optus pushed for a review of the USO. Potential reform of the scheme could involve NBN infrastructure being the "primary mechanism for ensuring customer connectivity".

If NBN infrastructure can't deliver an adequate voice service, then it could be provided over copper or mobile networks, Optus said.

"NBN Co could take ownership of the Telstra copper outside the fibre footprint," the Optus submission states.

"This will ensure that copper is available to help meet the USO in the short term. More importantly NBN Co will likely have stronger set of incentives than Telstra to ensure that the USO can be delivered through more cost effective alternate technology, enabling it to decommission the copper more quickly and reduce its costs to serve".

Funding for the USO could be through access charges or a non-commercial service levy for NBN and the government's current USO funding could be used to boost mobile coverage in regional Australia through an expansion of the blackspot program.

Vodafone and Optus also used the Regional Telecommunications Review to call for use of NBN infrastructure to boost mobile coverage in remote areas.

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Tags VodafoneTelstranational broadband networkTelecommunicationsoptusNational Broadband Network (NBN)universal service obligation (USO)

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