Senate votes on Telstra USO costs

The federal senate has voted to allow Telstra to recover $252 million for providing the USO (universal service obligation) during 1997-98, an amount significantly less than Telstra's claim for $1.8 billion.

The figure is also less than the preliminary analysis of USO costs from the Australian Communications Authority (ACA), which suggested Telstra's claim of a $1.8 billion net USO cost for 1997-98 should be closer to $600 million.

The 1996-97 costs were $251.6 million.

The senate's decision to cap Telstra's net universal service cost (NUSC) at $252 million comes weeks before the Australian Communications Authority's recommendations on the USO are due to be presented to federal ministers.

The USO is a requirement that telephone services are of a "reasonable" standard for customers throughout Australia. The federal government has appointed Telstra as USO provider, but the costs of the service are shared among all the carriers.

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