USO reboot: pass it to NBN Co, bring in mobile
The end of TUSMA, and the ongoing NBN Co-Telstra negotiations, herald the ideal time for a drastic rework of the Universal Service Obligation ? shifting it to NBN Co rather than Telstra, and bringing mobile into the mix. That?s the view of industry veteran professor Reg Coutts, a member of the expert panel that advised on the previous version of the NBN. And with Coutts? ideas including the possible provision of more mobile backhaul in regional areas, his concept might just mesh with the recent arguments from some parts of the mobile industry.
Coutts has been working on a paper ? still under development ? to ?get the discussion started.? In it, he argues that ?the time has come to reboot the USO to reflect he need for broadband and mobile service by all citizens in Australia. and develop a framework that involves the minimum of regulatory intervention to find alignment of interests encouraging co-investment with the private sector using a 'smart subsidies' program.?
In the paper, Coutts notes that ?curiously the mobile service, increasingly for many a substitute for the fixed phone service, has been ignored for any intervention in remote areas ? which have clamoured for better coverage since 2002.? Thus, he?s calling for mobile to be considered as part of USO reform, perhaps as an extension to the well-received but relatively small-scale A$10 milion mobile black spots program currently being executed by the federal government. Couts envisages his smart subsidy fund ?recognising that aces to a competitive mobile service should be a core objective of the long-term reform of the USO.?
Coutts also suggests that rather than setting up the smart subsidy fund as a completely new and separate entity, it might be possible to ?broaden the scope of NBN Co to include the smart subsidy fund [and in turn] to include infrastructure that would enable wholesaling the USO service and mobile service to competing regional retailers.?
?This option would more likely open ways NBN Co could better develop opportunities to stimulate shared infrastructure for the mobile network operators ? to more effectively increase the area of competitive supply of mobile services through providing more shared open access infrastructure.?
That might well fit with what key industry figures like Vodafone CEO Inaki Berroeta are asking for more choice in competitive mobile backhaul in regional areas to ease the business case for ex-metro investment. And charging NBN Co with managing shared infrastructure would certainly align with some current policy direction here as well. ?The government?s going in the right direction of basically saying that NBN Co can be instrumental [in mobile] in a number of ways; in terms of backhaul, and shared sites, which helps to redress the competitive imbalance,? noted Coutts.)
But it also highlights the second part of the proposal articulated in the paper: moving USO responsibility in general away from Telstra and onto NBN Co, already handily established as a national wholesale-only infrastructure provider. Under Couts? proposal, NBN Co would become the USO wholesale infrastructure provider, funded by government and contributions from eligible industry players (based on revenue) including Telstra.
?My argument is that he funding shouldn?t go through Telstra, per se. NBN Co [would] provide the infrastructure and then you?d potentially have competitive USO resellers. NBN Co is the logical infrastructure provider,? Coutts told CommsDay. ?Eligible revenue folk, mainly Optus and Vodafone, [currently] have to part with real money that they know goes to Telstra. the idea of it actually going to a fund, which then funds retailers ? of which they could be one ? is a far more equitable way forward.?
Of course, one of the more difficult practical considerations in such a realignment would be the financial details. Current USO arrangements ? under the purpose-built Telecommunications Universal Service Management Agency ? were linked into the original Telstra deal with NBN Co. And the USO itself is currently funded by an intricate mix of government contribution and industry levy.
Coutts admitted that, for a reworked USO scheme, the question of who pays and how would be a challenge. But he said that, with TUSMA being dissolved back into the Department of Communications and the renegotiations between Telstra and NBN Co still ongoing, the time was right to address the USO issue.
?There are more questions than answers at the moment, but. having this tightly constrained concept of the USO around the standard telephone service, it being delivered by Telstra, and the rest of the industry paying a subsidy, is crazy,? he said. ?I?d like to get he various players getting their heads around it!?