Widely available fibre-optic NBN, mobile, and satellite broadband services have rendered the telecommunications Universal Service Obligation (USO) obsolete, Minister for Communications Michelle Rowland has said in launching an overhaul that will test alternatives as early as next year.

Originally designed to ensure that all Australians have access to a basic phone landline service or payphone as a minimum, the real-world value of the policy – which is delivered by Telstra under the auspices of the federal Department of Infrastructure, Transport, Regional Development, Communications and the Arts (DITRDCA) – has rapidly diminished as communications alternatives emerged over the past decade.

With nearly 10 million copper-based landline phone services now disconnected under Telstra’s NBN agreement – and more than 2 million calls made on payphones monthly since Telstra made them free to use – the importance of landline services has evaporated as Australian households eschew fixed services for mobile or broadband-based alternatives.

Telstra currently uses the NBN to deliver around 3.5 million services to which the USO applies, with around 184,000 USO voice services supplied over Telstra’s copper network; 103,000 bundling voice and ADSL broadband; and 15,000 services delivered via 3G, dedicated wireless, or satellite services.

As new low earth orbit (LEO) broadband satellite services like Starlink bring high-speed communications to every corner of Australia, the mix of available landline alternatives has changed enough that, Rowland said, it is time to reinvent the minimum service obligation for the 2020s.

“The USO is an important safeguard to ensure all Australians can access phone services, regardless of where they live,” she said in launching the discussion paper that will guide an overhaul of the policy – which will particularly look for ways to improve communications outcomes for rural, regional, and First Nations communities for whom staying connected is particularly essential.

“The government has not yet made any decisions on how to modernise the USO,” Rowland said.

“While the USO is here to stay, our Government wants to ensure it is fit for purpose and encompasses new and emerging technologies like quality fibre connections and satellite services.”

“As far back as 2015, I said the USO needs to respond to changes brought on by the rollout of the NBN,” Rowland said.

“This new consultation process will allow industry and the community to have their say on how phone services are delivered in Australia.”

Public and industry consultation around the potential structure of the overhauled USO will continue through 1 March, with an eye on whether and how new technologies are capable of delivering “suitable levels of service for the USO”, DITRDCA said, with trials of potential landline alternatives expected to begin next year.

The department will also evaluate funding arrangements for rural and remote communications, with a review of the Regional Broadband Scheme expected to begin by the middle of next year.

Redefining universal services

The USO redesign is the latest chapter in a long-running narrative that has recognised how extensively new technologies have rapidly changed the policy’s role and operation.

A 2017 Productivity Commission report found that the voice-based USO was “anachronistic and costly” and should be wound up by 2020, with Australians “well served by mobile networks” and the then in-progress NBN promising to enable the USO to be “reframed to provide baseline broadband and voice services to all premises in Australia” once its rollout was complete.

In late 2018, the USO was recast as the Universal Service Guarantee (USG), which complemented guarantees of voice service with guarantees about the availability of at least a baseline level of broadband data services.

During 2021 and 2022, the Alternative Voice Services Trials (AVST) engaged NBN Co and five other telecommunications providers to test alternative voice technologies, although the trials also recognised a range of issues in areas such as outages and customer support – and recognised the deficiencies due to then-unavailable LEO satellite services.

Fast forward to 2023, and the NBN – which was officially declared complete in 2021 despite the fact that millions of households were still waiting to connect – is now focused on upgrades, with regional fixed wireless services bolstered and large swathes of properties in Queensland, Victoria and elsewhere ready to be upgraded to full fibre-to-the-premises (FttP) connections.

Just how those and other technologies will reshape the USO remains to be seen – but the NBN’s progress in recent years will continue to frame the discussion.