[LINK] Productivity Commission inquiry into the telecommunications USO

[David Boxall]

<http://www.pc.gov.au/inquiries/current/telecommunications/terms-of-reference>
Dated yesterday:


    Terms of reference

I, Scott Morrison, Treasurer, pursuant to Parts 2 and 3 of 
theProductivity Commission Act 1998, hereby request that the 
Productivity Commission undertake an inquiry into the future direction 
of a universal service obligation in an evolving telecommunications market..


      Background

Historically the standard voice telephone service has provided the basis 
of a ubiquitous telecommunications service which has been a fundamental 
part of Australian society. To ensure the benefits of this basic service 
are as widely available as possible, the regulated standard telephone 
service and payphones Universal Service Obligation (USO) provides for 
access to a standard telephone service and payphone services to 
consumers, where provision of those services might otherwise not be 
commercially viable. The USO is supported by a combination of ongoing 
funding from the Australian Government and an annual levy on carriers.

The Australian telecommunications sector has undergone significant 
changes over the last two decades, in market structure and technology, 
and will continue to evolve. There has been rapid and continuing 
technological development and innovation across the industry, with 
significant expansion in the availability, use and sophistication of 
mobile services, and ever increasing demand for broadband data services 
(including Voice Over Internet Protocol services). Demand for standard 
(fixed line) voice services and payphones has reduced and continues to 
decline.

The Australian Government is rolling out the National Broadband Network 
(NBN) which will use a range of technologies to provide a capped price 
wholesale-only broadband platform to all premises. NBN Co will deliver 
fast broadband to Australian premises as the infrastructure 'provider of 
last resort'. The availability of universal broadband will provide a 
platform for increased competition in the development of retail products 
and services for consumers.

In the context of these and other changes, the current USO arrangements 
may not be effective.


      Scope of the inquiry

The primary policy question to be addressed in this inquiry is to what 
extent, in the evolving Australian telecommunications market, Government 
policies may be required to support universal access to a minimum level 
of retail telecommunications services.

This will involve a consideration of the nature, scope and objectives of 
a universal service obligation, whether the retail market for relevant 
services will deliver appropriate outcomes for consumers without 
Government intervention and, if not, what options should be considered 
by Government to deliver universal services and the costs and benefits 
of these interventions.

In undertaking this inquiry, should the Commission recommend the 
retention of Government interventions in the market, it should make 
recommendations on:

  * what objectives are appropriate for a universal service obligation
    arrangement or its equivalent
  * what would be the scope of the services needed to be provided to
    achieve those objectives
  * whether particular sections of the Australian community have
    differing needs to which additional Government intervention should
    be directed e.g. low income, rural and regional
  * who should bear cost or regulatory burdens from those interventions,
    if any
  * the optimal funding model(s)
  * transitional arrangements from the current USO model.

The Commission should also have regard to:

  * the need for a durable framework that is flexible enough to
    accommodate technological changes
  * the role of, and impact on competition in relevant markets
  * contractual commitments that the Government has for the provision of
    the existing USO
  * the significant investments already made by Government, including in
    the NBN rollout
  * the current telecommunications regulatory framework and the
    Government's response to the 2014 Vertigan NBN Market and Regulation
    Report
  * additional policy reviews being undertaken by Government on a
    broader range of telecommunications consumer protections
  * relevant approaches adopted in other countries, particularly those
    with similar characteristics to Australia
  * the report of the 2015 Regional Telecommunications Review and the
    Government's response to that report.


      Process

The Commission is to undertake an appropriate public consultation 
process, including holding hearings, inviting public submissions from 
industry, consumer groups and the broader community and releasing a 
draft report to the public.

The final Report should be provided to the Government within 12 months 
of the receipt of these Terms of Reference.


-
David Boxall                    |  A fool is certain;
                                 |  an ignorant fool,
http://david.boxall.id.au       |  absolutely so.
                                            --Graffito