“Beating Around the Bush”Time to Reboot the USO
Comms Day ConferenceMelbourne
8th October 2014
Telco Subject Matter Expert
Presented byProfessor Reg Coutts
Telecommunications Subject Matter Expert
Professor Reginald Coutts
ITC Consulting – wireless, telephony and broadband specialist
Subject matter technologies advising in the following fields:
• Wireless technologies and spectrum management• Teclo regulation and policy• The Australian broadband industry• IP strategies, innovation and commercialisation• Expert witness• Board advisor
Summary – beating around the bush
USO Evolution Mobile in the USO? – coverage is key
Claimed mobile coverage
The Vertigan report observations The NBN and mobile – the new USO context Review of International Experience Let’s ‘stop beating around the bush’ Reform journey
History of USO Reform Legislated USO in 1991
Standard telephone service (STS) Public payphone
Iterative changes from 1995 to 2008 ‘Attempts’ to quantify the USO cost ‘Attempt’ to introduce contestability USO service inclusions
• Access to 64kbiti/s• Disability service access
2009 the NBN – ‘fixed broadband USO’! The USO - Retained the STS and invented TUSMA
Evolution phases of the USO
280 page report in 2004 concluding that Telstrashould continue as the USO Provider!
Include ‘mobile’ in the USO?
Telstra says•>99% of the population•30% of the land area
Optus, Vodafone•96-98% of the population•< 15% of the land area
Mobile BlackspotsProgramme•Strong demand!
THE essential service!
Vertigan Report – and the USO? No overt mention (‘beating around the bush’) Net $4 billion loss on the bush
‘equivalent broadband USO’ Not legislated like the current USO $230 million (estimate) per annum to be funded by:
• Internal NBN Co cross subsidy• (further) industry levy ($29 million in 2013)
• Budget appropriation ($100 million currently)
NBN Co the broadband wholesaler?• Legislated uniform whole-sale pricing – rural competition
The NBN, Mobile - the new USO context NBN Co and Telstra Negotiation
NBN Co to ‘take-over’ the Telstra copper Telstra NOT the ongoing USO provider? NBN Co can provide STS via satellite/fixed wireless
Fixed and Mobile Broadband Fixed broadband and mobile broadband
• Competition AND complementary
Backhaul critical for both Shared infrastructure NOW encouraged
Literature & Overseas Experience Literature
International• OECD, ITU/InfoDev, World Bank• Academic, EU Directives• Country case studies
Australian• TJA articles• Government – ACA, Department• Regional Reviews
Chile and ‘Smart Subsidies’ Competition reduces the required state funding Leverage private and community investment Clear transparent processes
Administrative USO costing (ie Australia) unusual!
Draw from history/experience!
‘Stop Beating Around the Bush’ Market trends
Fixed to mobile voice Broadband mobile growth
Regional telecommunications reviews! Esten’s Review (2002) Glasson Review (2008) Sinclair Review (2012)
NBN Co – Telstra negotiation USO role change
NBN and the bush - bipartisan ‘equivalent broadband USO’
• Vertigan report - $230 million per annum (estimate)
Is Government deaf?
Stage 1 – NBN STS Variant NBN Co – the USO wholesaler
Modify the STS and payphone (Free WiFi) • LTSS satellite and fixed wireless• Competitive USO retail (USO funded)• Copper retirement plan!
Mobile Black-spots program Review un-met coverage demand Opportunities for reduced cost
• Backhaul opportunity assessment• Shared infrastructure
Option – Combine through NBN Co
Greater industry acceptance!
Stage 2 - Mobile - Broadband Fund
Review of stage 1 NBN Co the USO wholesaler Mobile Black-spots Program
• Consider ongoing fund
NBN Co synergy with MNOs
Universal Service Fund Regional diversity Funding alternatives Role of NBN Co?
Observations NBN is a “game changer” including the USO
“equivalent broadband USO”
Mobile service MUST be an objective Coverage is key for ‘access’
USO Reform is a Staged Journey Stage 1 – NBN STS variant
• NBN Co becomes the USO wholesaler with retail competition
• Mobile Black-spots deliver, audit & review
Stage 2 – Mobile - Broadband Fund• Includes mobile• ‘smart subsidies’• Regional
Acknowledgements
Views The views expressed are my own but I acknowledge the
Vodafone Australia commissioned me to think about ‘essential in the bush’.
Sources of Advice John de Ridder and his ‘Economuse’ articles
Detailed report soon!
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