USO claim closer to $600 million: ACA says

Telstra's claim of a $1.8 billion net universal service obligation (USO) cost for 1997-98 should be closer to $600 million, according to a preliminary analysis from the Australian Communications Authority (ACA).

The ACA yesterday released two independent reports it had commissioned as part of its assessment of Telstra's 1997-98 figure. According to officials, the reports contain recommendations about input values that the ACA should use to assess Telstra's claim, which amounted to $1.8 billion compared with $251.6 million for 1996-97.

Dr Rosyln Kelleher, executive manager for the ACA's consumer affairs group, said: "The adoption of the input values recommended in both reports would result in a significant reduction -- compared with Telstra's claim -- in the overall net universal service cost (NUSC)."

Kellleher added that, combined with recommendations contained in the draft report, The "Year 1" Cost Problem released earlier this year, the NUSC could be further reduced to around $425 million.

According to Kelleher, a final assessment of the reports and recommendations could present different results.

The two reports are :

ACA USO Forward Looking Technologies Study Final Position Paper, prepared by Gibson Quai & Associates Pty Ltd and Ovum Pty Ltd; andTelstra's Weighted Average Cost of Capital: Application to the USO, prepared by The Allen Consulting Group Pty Ltd.

The USO is the requirement that telephone services meet an adequate standard anywhere in Australia. Telstra is currently responsible for delivering the USO, but the costs are shared amongst all carriers depending on market share.

The Government recently announced decisions to consider putting the USO out to tender and implement legislation to cap the costs around $253 million for 1997-98.

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