Media Release

Telco universal service reforms passed

The Minister for Broadband, Communications and the Digital Economy, Senator Stephen Conroy, today welcomed the passage of the last major piece of legislation underpinning the National Broadband Network (NBN) and the historic structural reforms to the telecommunications sector.

Senator Conroy said the universal service reform legislation will ensure the ongoing delivery of key telecommunication consumer safeguards during and after the rollout of the NBN.

“This legislation safeguards key telecommunications services for all Australians, particularly those in rural, regional and remote Australia, during and after the transition to the NBN,” Senator Conroy said.

“Telstra has historically had a regulated Universal Service Obligation (USO) to make standard telephone and payphone services reasonably accessible to all Australians.

“However, under the Structural Separation Undertaking recently accepted by the ACCC, Telstra will progressively decommission its copper network as the NBN optical fibre network is rolled out. The wholesale-only NBN will create a level playing field for all retail providers and enable the industry to move to a new, more competitive structure that will benefit consumers

“The legislation responds to this structural reform of the industry by moving from a regulatory model for delivery of universal service, with obligations imposed directly on Telstra and other service providers, to a more accountable and flexible contractual model.”

A key aspect of the package of legislation is the establishment of a new agency, the Telecommunications Universal Service Management Agency (TUSMA). From 1 July 2012 it will be responsible for entering into, and managing contracts or grants, to ensure:

• all Australians have reasonable access to a standard telephone service (the USO for voice telephony services);
• payphones are reasonably accessible to all Australians (the USO for payphones);
• the ongoing delivery of the Emergency Call Service by Telstra (calls to Triple Zero '000' and '112');
• the ongoing delivery of the National Relay Service; and
• appropriate safety net arrangements are in place to support the continuity of supply of carriage services during the transition to the NBN.

To ensure continuity in the transition to the NBN, the majority of TUSMA’s initial agreements will be with Telstra.

The package of legislation also removes red tape by replacing two existing industry levies with a single levy which will contribute to meeting TUSMA’s costs.

“For the first time, the Government will contribute significant funding towards the costs of delivering key telecommunications safeguards,” Senator Conroy said.

The Government will contribute base funding to TUSMA of $50 million per annum during 2012–13 and 2013–14, and $100 million per annum thereafter. To facilitate a smooth transition, the Australian Government will supplement its base funding in the first two financial years so that contributors to the industry levy, with the exception of Telstra, do not face an increased aggregate funding contribution.

Date: 21 March 2012

Contact: Suzie Brady 0408 258 457