ACA releases final USO assessment

The Australian Communications Authority's (ACA) final assessment of Telstra's 1997-1998 net universal service cost (NUSC) is almost half the carrier's estimation.

According to the ACA, the cost of the 1997-1998 universal service obligation (USO) is about $548 million, compared with Telstra's claim of $1.8 billion.

The ACA released on Friday its final figure in the long awaited assessment of the USO.

The USO is a requirement to deliver telephone services of a "reasonable" standard to customers throughout Australia. Telstra is currently responsible for ensuring services are delivered to customers but the costs are shared amongst all carriers.

In September 1998, Telstra submitted a USO claim for $1.8 billion, a large increase compared with the figure of $251.6 million for 1996-1997.

To provide a more reasonable cost to competing carriers, the Government capped the 1997-1998 NUSC at $253.32 million, the cost which will be shared by all carriers according to market share.

In the absence of this capped amount, which will apply for the next two years, the ACA on Friday recommended a USO cost of $548,087,665.

According to the ACA, several factors including additional technology and cost adjustments were contributing reasons to the calculated figure.

Tony Shaw, chairman of the ACA, said, "The significant difference between the amount claimed by Telstra and the final assessed amount is mainly due to the ACA's view that the USO would be most efficiently supplied using a mixture of cable, terrestrial radio and satellite technologies. In comparison, Telstra used only cable and one radio solution in its claim.

"Although the ACA's assessment of the NUSC at $548,087,665 exceeds the capped amount of $253,320,000, it is important to note that the services Telstra is obliged to provide to rural and remote customers are not affected. The obligation to provide standard telephone services and payphones is not linked to industry contributions to the funding of the USO." Shaw said.

According to ACA officials, a report into future USO costing and funding arrangements is due to be released by the Department of Communications, Information Technology and the Arts shortly.

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