Rethinking USO in a NBN world

The national broadband network brings with it a profound transformation of our telecommunications sector and it's time to consider whether the current Universal Service Obligation (USO) regime is up to speed.

The construction travails of NBN Co, a Malcolm Turnbull staffer behaving badly and conspiracy theories about Foxtel provide more fodder for both sides of the noxious NBN debate to further their positions. However, a national broadband network, whether it’s Fibre-to-the-Premises (FTTP) or Fibre-to-the-Node (FTTN), brings with it a profound transformation of our telecommunications sector.

It’s a transformation that impacts every aspect of our lives and the narrow-minded political circus, that has accompanied the NBN these last four years, could end up as a lost opportunity to re-examine critical issues.

One such issue is the Universal Service Obligation (USO), which safeguards key telecommunication services for all Australians, and was updated in 2012 to accommodate the transition to the NBN

What is the USO?

The USO was conceived at a time when people needed access to telephone and emergency services but unfortunately the cost of providing telecommunication services into rural and remote areas was prohibitive for many people. In essence, it was decided that access to certain communication services was a universal right and government devised a strategy to facilitate service provision.  

This included installation and operation subsidies for communications services in rural and remote areas. But time has moved on and Australia must confront the 21st century and look at what the USO currently provides and what it must provide.

With the introduction of the NBN and the decommissioning of Telstra’s copper network the government reviewed the USO during 2010-2011 and decided to introduce a new universal service regime. Prior to that, the USO was outlined in the Telecommunications (Consumer Protection and Service Standards) Act 1999 which has been updated with the passing of the Telecommunications Legislation Amendment (Competition and Consumer Safeguards) Act 2010.

But does the new regime provide what’s needed for future generations and equitable access for all Australians to government services provided over the NBN, or does it need a further rethink?

USO and the NBN

The key change to the USO has been a shift 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.”

To facilitate this new approach the government introduced a package of legislation that included the Telecommunications Legislation Amendment (Universal Service Reform) Act 2012, the Telecommunications Universal Service Management Agency Act 2012 and the Telecommunications (Industry Levy) Act 2012.

The Telecommunications Universal Service Management Agency (TUSMA) was established to enter into and manage contracts and 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
  • continued availability of untimed local calls for customers outside standard zones, and
  • that appropriate safety net arrangements are in place to support the continuity of supply of carriage services during the transition to the NBN.

TUSMA is funded through a government grant of $100 million until 1 July 2014 and $100 million per annum thereafter. An industry levy for the USO is currently determined and managed by the Australian Communications and Media Authority (ACMA) and this levy will continue to be the key funding source for the provision of the USO.

On June 23 2011, the former communications minister Stephen Conroy announced an agreement with Telstra to put in place a change process as the transition to the new regime occurred. What the agreement amounted to was a management process that would facilitate shifting key USO services from copper to the NBN. Telstra was commissioned by the government to continue providing key aspect of the USO for twenty years to ensure there was a smooth transition process.

The Department of Broadband, Communications and the Digital Economy (DBCDE) released a paper in 2011 titled Universal Service Policy in the National Broadband Network environment which provides the details on how the USO would be affected by the shift to fibre.

A key aspect of the NBN model is NBN Co’s provision of a layer 2 connection between customers and service providers which means that NBN Co does not directly provide the USO. Service providers will be required to provide certain USO facilities over the NBN including access to emergency call services.

DBCDE describes how negotiated agreements were reached for the provision of the USO over the NBN based on the principals of:

  • Ensuring continuity of basic universal service outcomes for consumers, taking into account the government’s policy of maintaining reasonable access to a standard telephone service through the existing copper customer access network.
  • Facilitating a transition to greater competition
  • Recognising the costs of delivering the services and implementing cost-effective arrangements
  • Achieving timely, transparent and definitive outcomes
  • Implementing arrangements that do not impose undue financial and administrative burdens

A key failing of the new USO

Access to basic services (health, education and other government services) that are shifting online is vital for future generations. But should government services that are to be provided universally to Australians living in rural and remote areas that rely upon communications technology be added to the USO?

Certainly, because this will ensure that rural and remote Australians gain equal access and reduce the government’s costs through unified delivery.

The government currently provides access to some of these services utilising a range of technologies, for example School of the Air and remote learning has been provided to remote Australians utilizing HF radio since the 1950s and more recently over satellite in some circumstances. But what of future education and health services, some of which we’re seeing today such as remote diagnostics for health and quarantine services? What about access to taxation, superannuation, and the myriad of other government services that are now available online?

A key failing of the new USO is the requirement that Australians have an active service provider connection to be able to access USO services including emergency services and home health monitoring for the aged, disabled and infirm over the fibre NBN.

A DBCDE spokesman told Technology Spectator:

It is not technically possible for the NTD [network termination device] to provide service where there is not an RSP [service provider]. However, similar to current arrangements, all NBN customers who have a standard telephone service (which is the goal of the USO policy) provided by an RSP will have access to the Triple Zero emergency call service.

Further, all mobile phones in Australia are able to access Triple Zero even without credit, a current service or a SIM card. Hence, anyone with a mobile phone is able to access the Triple Zero service where there is coverage from any of the three mobile carrier networks.

The DBCDE spokesman’s remarks should be put into context. If a premise has a NTD that is connected to the fibre and turned on then it is active on the GPON network, all that is needed for traffic to pass to and from the NTD is the device configuration and associated configuration at the upstream network devices.

A default configuration could be setup automatically but under the NBN model, NBN Co will only offer layer 2 services so it is necessary to manually identify to which service provider network the NTD traffic is to be routed.

To provide home health monitoring, for example, the government would need to pay a service provider for the service connection. The cost of doing this should not be discounted as Australia’s population ages and it is quite apparent that the USO amendments in 2012 were not adequately forward looking.

Over-reliance on mobile

The government position regarding access to emergency services relies upon access to a mobile handset even if it does not have a SIM card. This is a quite ridiculous premise because it means that people without an active NBN retail service will need to keep a mobile handset at home, remember to charge it daily in case it is needed at a time of emergency and to keep it handy.

Who is going to train the disadvantaged, elderly and disabled in mobile handset maintenance and operation? What happens if the mobile handset is misplaced or breaks or not charged?

Government will be required to ensure that home health monitoring of the aged and disabled is possible, even if they cannot afford a NBN service provider connection. Failure to do so would be discriminatory and places pressure on the current policy to shift the sick, aged and disabled out of government care into the community.

Contemplating NetCare

In the US, Google Fiber is being rolled out in response to Google’s despair at the slow pace of change within the US telecommunications industry. One feature of Google Fiber is a free low speed internet (5 Mbps / 1 Mbps) connection for anyone that pays $300 to have fiber connected to their premise.

It might be argued that Google’s business model permits the cost of providing free internet connections to be covered by other income, not necessarily associated with the provision of internet connections to paying customers. Google’s actions do, however, demonstrate that old business models which the telecommunications industry has relied on for the past 50 years are not sustainable moving forward.

It’s time to update the USO to meet the needs of future generations. Key features of a next generation USO, which might be aptly called NetCare, should include all of the current USO services and:

·         Free low rate internet connection

·         Access to emergency telephone over the NBN (fibre, wireless, satellite)

·         Online access to all government services

·         Access to government and select private health and education services

The low rate internet connection should be comparable with that provided by Google Fiber (5 Mbps / 1 Mbps) which will ensure vital services can be provided with an adequate level of quality including access to emergency services and remote health monitoring for the aged, disabled and infirm.

The next Australian government should hold a public enquiry into what NetCare should encompass and form a committee of experts to investigate how the provision of NetCare should be funded.

The NBN needs to be more than just a political football. The conversation around delivery and costs is important but so is the need to ensure that the money and effort invested actually ends up providing a network that is up to speed with our future needs. 

Mark Gregory is a Senior Lecturer in Electrical and Computer Engineering at RMIT University