Universal service has been described by the International Telecommunications Union as the provision of telecommunications services permitting access to a defined minimum service of specified quality to all users everywhere, and, in light of the specific national conditions, at an affordable price. The notion of universal service also includes service to disadvantaged users.
The rationale for imposing a universal service obligation (USO) is political, social and economic. It is desirable on political grounds that citizens in a democracy have access to communication facilities which they require to exercise their political rights, and it is desirable on social grounds that all individuals should have access to communication facilities to avoid a gulf emerging between "information-rich" and "information-poor" groups.
There are also persuasive economic grounds for encouraging attachment to the telecommunications network. These arise from the existence of externalities: new customers within the network not only benefit themselves, but create extra opportunities for existing customers. There is also evidence of dynamic benefits for the economy arriving from the development of the telecommunications sector.
The relationship between economic and network development is thus a reciprocal one: growth in one encourages growth in the other. The presence of these externalities -- and the social and political considerations -- create a prima facie case for imposing a USO. FN1
The regulatory framework created by the Telecommunications Act 1996 sets out policy objectives designed to smooth the transition from a market which was dependent on a monopoly provider of essential telecommunication services to one in which there is robust competition among a variety of telecommunication services providers. The policy objectives include the promotion of universal and affordable telecommunication services, the promotion of telecommunication services that are responsive to the needs of users and consumers (including the disabled), the provision of a wide range of telecommunication services in the interests of economic growth and development, and the promotion of fair competition within the telecommunications industry.FN2
The Minister for Posts, Telecommunications and Broadcasting is responsible for the development of the telecommunications industry policy through the issue of policy directions relating to, among other things, the administration of the universal service fund and tariffs. The Minister also approves any regulations made by South African Telecommunications Regulatory Authority and oversees the activities of the Universal Service Agency.
The South African Telecommunications Regulatory Authority (SATRA) is a statutory authority set up under the Telecommunications Act FN3 in February 1997. It is the regulatory watchdog for the telecommunications industry which is responsible for implementing policy by performing a broad range of regulatory functions with a high degree of independence. It is charged with promoting quality and affordable services to those people previously denied them, paving the way to bring new players into the telecommunications industry, and issuing all new licences in the sector. In its role as the independent regulator SATRA balances the interests of consumers with those of the stakeholders in the incumbent monopoly operator (Telkom) and the new market participants.
SATRA's mandate includes the promotion of a wide range of telecommunications services in the interest of the economic growth and development of the country and in the public interest generally. During 1997, SATRA took over the management of 250,000 licences previously with the Department of Communications, including their frequency planning, allocation and monitoring functions.FN4
The Universal Service Agency (USA) was launched in May 1997 as a statutory body created under the Telecommunications Act.FN5 It is funded by Parliament and reports to it via the Minister. Its minimum life is five years, after which many of its functions may be taken over by SATRA.FN6
In setting up the USA, it was recognised that the classic approaches to implementing a competitive telecommunications policy would not be sufficient to keep the focus on the goal of universal service long enough to redress the imbalances caused by the former apartheid system which had left the vast majority of black South Africans, particularly in rural communities, without access to basic communications services. Liberalisation trends, associated with the spread of the global information highway and the legitimate needs of South African business and urban areas for advanced services, could easily combine to draw resources away from the delivery of basic services to rural and disadvantaged areas.FN7
The USA's objectives include advising the Minister on ways to bring about universal access and service, coordinating initiatives by service providers such as Telkom, Vodacom (50% owned by Telkom) and Mobile Telephone Network (MTN) and to extend access to telecommunications by working with community- based organisations, non-governmental organisations, donor organisations and businesses. The agency manages the Universal Service Fund which holds a percentage of funds allocated from the licences of all telecommunications suppliers to support projects that increase universal access to service.FN8
While the long-term goal of the agency is to achieve universal service (a telephone in every home), the more immediate task is to provide universal access, which is a public telephone within a reasonably accessible distance (ie within 30 minutes walking distance).FN9 As a primary strategy for achieving this, the agency is establishing multi-purpose community telecentres. A telecentre is intended to serve a particular community, and, as well as telecommunications, many are intended to provide other services such as small business support, health, and education and training services. In this way, a telephone is used by many people for many purposes -- making it economically viable and meeting community needs. For telecentres to be a long term solution, they must be sustainable. Thus, the agency has committed itself to working with other organisations, such as schools, libraries, churches, existing community centres, and civic organizations. The key point is to develop a replicable model for running telecentres effectively in disadvantaged areas.FN10
The Universal Service Fund is set up under the Telecommunications Act to subsidise "needy persons towards the cost of the provision to or the use by them of telecommunications services", and to repay Telkom and other licence holders with USOs for extending their services to poorly or unserved areas and communities. The fund is fed by contributions from Telkom and the cellular operators at a level set by SATRA over and above their licence fees. SATRA also decides who gets the money. Telkom has first call on the money, at least until it has rebalanced its tariffs to recover all of its costs associated with USOs for all areas of the country. After that, any remaining money goes to the needy.FN11
Under the Telecommunications Act, the Minister issued Telkom with a public switched telecommunications services licence which gave it the exclusive right to provide certain of telecommunications services, including local, domestic long distance, and international services for five years. This period may be extended by one year if Telkom achieves its roll-out targets described in Vision 2000FN12 by the year 2002.
Under its licence, Telkom must provide, on request, basic telephone services to all the inhabitants of South Africa. The provision of this service is available to customers whose requests for such service have been processed in accordance with a fair and transparent credit referencing test.
Among the most critical provisions of the licence are those relating to the network roll-out obligations assumed by Telkom in connection with the expansion and modernisation of the public switched telecommunication network (PSTN). These obligations, which were based on network roll-out targets determined through a competitive bidding process, are structured to maximise the provision of telecommunication services to historically disadvantaged groups.
Telkom is liable to monetary penalties for the number of exchange lines by which it fails to achieve its network roll-out targets. The network roll-out targets relate to different categories of customers, such as priority customers, including hospitals, libraries, local authorities, post offices and schools, and under-serviced areas including townships and other areas where the teledensity rates for households are low. There are also monetary penalties for failure to achieve specific quality of service targets relating to the number of faults reported by customers, and the rate at which such faults are resolved, the percentage of customer orders met within specified periods of time and the serviceability of public pay phones.
The Ministerial determination relating to tariffs imposed a cap on the prices which Telkom may charge for a basket of telecommunications services which it provides exclusively. This determination had effect for three years. SATRA is now responsible for regulating tariffs, subject to a Ministerial policy direction that mandates continuation of a price cap regulation in a manner that will not have a materially adverse impact on Telkom's ability to fulfil its licence obligations.
The Independent Communications Authority of South Africa Act 2000 FN13 provides for the establishment of the Independent Communications Authority of South Africa (ICA), the dissolution of the Independent Broadcasting Authority and SATRA, and the transfer of the functions of the latter authorities to the ICA. This is effectively a merger of the two former authorities.FN14
The regulatory framework for the provision of telecommunications services in New Zealand has remained largely unchanged since deregulation in March 1989. It is characterised by open market entry and no telecommunication-specific regulator. Instead, reliance is placed on general competition law under the Commerce Act 1986 to maintain the conditions for effective competition. A number of supplementary measures described below are in place to protect network service providers and user interests, to facilitate entry and to assist in monitoring.FN15
The Telecommunications Act 1987 provides a range of legal protections to support telecommunications network operation and use. It also provides for network operator status: a designation designed to facilitate entry into and competition in telecommunications markets by providing access to land, particularly the road reserve, to lay cables or to construct lines. It is not essential to be designated as a network operator to provide telecommunications services.
The Act also provides regulation-making powers for promoting a competitive market in international telecommunications services and for requiring the incumbent former monopoly operator (Telecom) to disclose certain information publicly for the purpose of facilitating effective competition in telecommunications markets.
In September 1990 the Government sold its entire 100 percent shareholding in Telecom Corporation of New Zealand Limited, to private sector interests. The Government set certain conditions for the sale of Telecom. One of these conditions was the retention by the Government of a Kiwi Share with special voting rights to control the maximum shareholding of any single foreign party and transfers of blocks of shares among parties, and to ensure Telecom's compliance with its residential services pledges which became known as the Kiwi Share Obligations (KSO).
Telecom provided the Government with three pledges in respect of its residential services. The Government included these pledges in the Articles of Association of the Corporation. These pledges provide the following commitments:
Telecom also agreed to a request from the Minister of Consumer Affairs to publish quality of service indicators for the residential telephone service.FN16
The Telecommunications (Information Disclosure) Regulations 1999, which came into effect in January 2000, impose the following information disclosure requirements on Telecom:
The separate financial statements for "local loop" and "other", and information about the KSO, were designed to assist companies in their negotiations of interconnection agreements with Telecom. The price of interconnection includes a contribution to Telecom's KSO losses.FN17
In the United Kingdom the nationalisation of telecommunications services in 1911 removed the oversight of service provision from the legal to the administrative sphere for a period of seventy years.FN18 The gradual process of market liberalisation and privatisation of the telecommunications sector in the 1980s was marked by the passing of the Telecommunications Act 1984 which returned oversight to the legal sphere with highly detailed legislative and licence provisions for universal service, price control and interconnection.
In the 1980s, only the incumbent monopoly provider, British Telecom (BT) and Mercury were licensed to run "fixed link" networks. This duopoly policy remained in force until 1991, when a comprehensive review led to a realisation of the potential for full liberalisation of the telecommunications market.
The Telecommunications Act 1984 sets out the licensing and regulatory regime for those providing telecommunication services. The Act set the framework for a competitive market for telecommunications services in the United Kingdom by abolishing BT's exclusive right to provide services, and by establishing its successor company in the private sector.
The Act also established the regulator and set out the duties of the Director General of Telecommunications and those of the Secretary of State for Trade and Industry in relation to telecommunications. Key duties of both are to promote the interests of consumers and maintain and promote effective competition.
The Telecommunications Act 1984 established the independent regulatory body, the Office of Telecommunications (OFTEL). This is a non-ministerial government department under a Director General of Telecommunications who is independent of ministerial control. The cost of OFTEL's activities is funded largely from licence fees, which in the case of the largest public telephone operators are broadly related to the size of turnover of the licensed business.
OFTEL has sole responsibility for the monitoring and enforcement of all classes and types of telecommunications licences. OFTEL also has responsibility for modifying the terms of existing licences, either by agreement or after a reference to the Monopolies and Mergers Commission. From 1984 OFTEL directly regulated BT's prices through conditions on its licence. Now, in most cases, individual tariffs are not subject to scrutiny. The current price cap was agreed with BT for the period 1997 to 2001 and is focused on protecting lower and medium-spending customers' bills.FN19
The objective of universal service for the UK Government and OFTEL has been to ensure that those telecommunications services which are used by the majority, and which are essential to full social and economic inclusion, are made available to everybody on reasonable request in an appropriate fashion and at an affordable price.FN20
OFTEL has stated that social and consumer policy objectives will not all necessarily be achieved through the operation of well-functioning competitive markets. Universal service is a dynamic and evolving concept – currently access to voice telephony at affordable prices is defined as the key constituent of the universal service "basket" because it is seen as necessary for full participation in society.FN21 In July 1997, OFTEL established the level of universal service for the 4 year period from 30 September 1997 to 29 September 2001 as comprising:
The EC Interconnection and Revised Voice Telephony Directives permit a funding mechanism to be set up to which other telecommunications operators would contribute so that the universal service providers are compensated by payments out of the fund should the provision of these services become an undue financial burden.FN22 Currently such a fund has not been setup and no operator contributes anything to any other operator's USO costs.
USOs are implemented through licence conditions for the provision of telecommunication services to people who might not be reached in a purely competitive market (eg the disabled, the impecunious and remote rural users). Currently universal service is provided at a geographically averaged tariff which is not cost reflective: it is used as a crude proxy for ensuring universal access.FN23
Condition 1 of the telecommunication licence granted to BT obliges it to provide voice telephony and other telecommunication services to every person who requests them unless the Director is reasonably satisfied that demand is met by other means such that it would not be reasonable to expect BT to provide the services . This obligation applies within the UK excluding the area for which the City of Kingston upon Hull (Kingston Communications) is licensed to provide services. Similar provision is made for the provision of telecommunication services in rural areas by Condition 2. Condition 53.4 provides the following exceptions to BT's obligation to provide voice telephony services:
These exceptions also apply to the obligation to provide other telecommunication services.FN24
Kingston's licence covers the Kingston Upon Hull area. Condition 1 places a USO on Kingston in their licensed area which is the same as that placed on BT. Condition 54 applies the same exceptions to this obligation for both voice telephony other telecommunication services.FN25
The City of London Telecommunications (COLT) was originally licensed to run telecommunications systems in London. It subsequently obtained a licence to run a telecommunication system throughout the United Kingdom. Condition 1 of COLT's licence does not place an instant service obligation on it. If COLT becomes a well-established operator in the provision of a specified telecommunication service in the United Kingdom, or a part of the United Kingdom, and the service is not available to a person within the applicable area who reasonably requests it, the Director may direct that apparatus is installed to meet that request. A well-established operator is one with 25% of the relevant market.FN26 Condition 28 contains similar exceptions to those included in the BT and Kingston licences.FN27
In 1996, the Government increased the potential for competition in public call box services by removing the requirement for a Determination from the Director General before a licensee could commence or cease services. BT and Kingston, however, remain subject to USOs in this area to ensure the provision of public call box services in more remote locations.
On 1 July 1997, the Australian telecommunications industry became subject to a new regulatory framework designed to promote:
Under this framework, industry self-regulation is encouraged in all areas, including access, technical standards, interconnection standards, and consumer and customer service standards. Government regulators have powers to intervene if industry self-regulation is not working effectively in specific instances.
The Telecommunications Act 1997 FN28 established a regulatory framework governing activities of carriers and service providers. The Act also created obligations on carriers and carriage service providers for the benefit of consumers, including: USOs, untimed local calls, customer service guarantees (CSGs), provision of emergency call services, privacy protection of communications, promotion of competition, participation in the Telecommunications Industry Ombudsman scheme. Finally, it provided a framework for development of codes of practice covering a broad range of matters by industry and other interested parties, overseen by the Australian Communications Authority (ACA).
In 1999, the USO regime was moved to the Telecommunications (Consumer Protection and Service Standards) Act 1999.FN29
The Telecommunications (Consumer Protection and Service Standards) Act 1999 FN30 largely carries over the universal service regime previously contained in the Telecommunications Act 1997.
Universal service providers are requiredFN31 to lodge a universal service plan (USP) outlining how they intend to fulfil their USO obligations. This plan must be approved by the Minister for Communications, Information Technology and the Arts. The USP is designed to provide standards against which universal service providers can be measured, and to provide the public with information about USO services and obligations.
The ACA is obligedFN32 to maintain a public registerFN33 of all approved USPs in force. Telstra's USP was approved in May 1998 and is currently the only registered plan.
The Telstra Corporation Act 1991 FN34 is administered by the Australian Competition and Consumer Commission (ACCC) and imposes a price cap on a basket of Telstra's basic services. Price controls apply to charges for local calls, local calls from payphones, long distance calls and international calls; charges for leased lines; connection and line rental; and charges for mobile services.
New retail price controls applying from July 1999FN35 remove the subcap on line rental services and impose a new subcap of CPI - 0% on a basket of local calls and line rentals for services to residential and business customers. Additional provisions are designed to ensure protection for low volume users:
The new CPI - 0% price cap provides Telstra with the ability to raise line rentals towards cost, provided it reduces local call prices sufficiently so that revenue from the two services does not increase by more than the CPI. Apart from these legislative controls on Telstra's ability to raise prices for basic services, telephone companies set their own prices.
The Australian Communications Authority (ACA) is the regulator of the Australian communications industry. It was formed in July 1997 by merging the Spectrum Management Agency (SMA) and the Australian Telecommunications Authority (AUSTEL). The ACA regulates telecommunications consumer and technical matters, and manages radiocommunications.
The telecommunications issues for which the ACA is responsible include:
The Australian Competition and Consumer Commission (ACCC) regulates competition in the telecommunications industry, having taken over these responsibilities from AUSTEL in July 1997. Its major functions are:
The ACCC is also responsible for general consumer protection and competition regulation across all industries.
The Department of Communications, Information Technology and the Arts provides advice on all regulatory policy aspects of the telecommunications and radiocommunications sectors including legislative and administrative arrangements for Telstra, price regulation, universal service, role and functions of the ACA, consumer safeguards, carrier powers and immunities, electromagnetic energy and public health issues, matters relating to the carriers' network rollout, and managing Australia's interest in international and regional telecommunications agencies and organisations.
The Telecommunications Industry Ombudsman (TIO) was established to resolve disputes between telecommunications companies and residential and small business customers. The TIO is now governed by the Telecommunications (Consumer Protection and Service Standards) Act 1999.FN39
The TIO is a free, independent dispute resolution forum for complaints which is funded through charges levied on carriers and service providers on the basis of complaints received against them. It has the authorityFN40 to investigate complaints about: billing, faults, mobile services, Internet access, the standard telephone service, pay-phones, operator and directory assistance, printed and electronic white pages, privacy, land access, breaches of industry codes or standards and the CSG. The TIO can only take up a complaint if the customer has first tried to resolve it with their telecommunications company or ISP. If agreement cannot be reached, the TIO can make binding determinations up to the value of $10,000 and recommendations up to the value of $50,000.FN41
In broad terms, the USO is the obligation to provide reasonable access to defined telephone services to all people in Australia on an equitable basis, regardless of where they reside or carry on business.FN42 The services currently defined under the USO are the standard telephone service (or for a person with a disability, an equivalent service to comply with the Disability Discrimination Act 1992), pay-phones and prescribed carriage services, although none of the latter have been prescribed.FN43
The Minister for Communications, Information Technology and the Arts has the power to declare any telecommunications company to be a national universal service provider or a regional universal service provider for a specified area.FN44 While Telstra is the sole declared national universal service provider and is therefore responsible for providing the USO throughout Australia, the Government has announced that it will introduce competition into USO provision by inviting carriers to tender for the USO in two regional pilot areas.FN45
The Act provides a scheme under which the total net losses that result from supplying services to certain areas in fulfilling the USO are shared among carriers in proportion to the revenue they earn as carriers ("eligible revenue").FN46 The Government has recently announced that it plans to expand the responsibility for paying the USO to include carriers and carriage service providers who earn more than a prescribed amount.FN47
Under the scheme the total net cost of providing USO services in loss making areas is calculated, and the contribution (levy debit) for each carrier to fund that loss is assessed. Each carrier that has a levy debit must pay an amount of levy equal to that debit. However, if a carrier has incurred a loss in providing USO services, it is given a credit for that loss (levy credit). If the levy credit of a carrier exceeds its levy debit -- as was the case with Telstra in 1997/98 -- the carrier is reimbursed from the amounts that the other carriers pay by way of levy. The universal service levy is imposed on carriers under the Telecommunications (Universal Service Levy Act) 1997.FN48
The ACA is required to make an annual assessment of levy debits and levy credits based on claims for levy credits and annual returns of eligible revenue. The ACA's assessment must set out, among other things, the net universal service cost (NUSC) of any USP. The Telecommunications Laws Amendment (Universal Service Cap) Act 1999 FN49 places an upper limit on the NUSC for 1998/99 and 1999/2000 of $253.32m plus CPI unless the Minister determines otherwise. In fact the Minister has determined that the amount will be increased to $280m for those years and, in future years, will now be costed in advance.FN50
The Act also contains a digital data service obligation (DDSO)FN51 under the universal service regime with effect from 1999/2000. Telstra has been declared the sole digital data service provider. The ACA is required to perform an assessment of the digital data cost of a digital data service provider after the end of the financial year. A digital data service provider must provide the ACA with a claim setting out its digital data cost, which is not a capped amount, within 90 days of the end of the financial year.FN52
Under the Customer Service Guarantee (CSG),FN53 the ACA may make performance standards to be complied with by carriage service providers for customer service. If a carriage service provider contravenes a performance standard, damages must be paid to the customer for the contravention. The amount payable for a particular contravention is specified in the scale of damages determined by the ACA. The TIO may issue an evidentiary certificate for a contravention of a performance standard.
In November 1997, the ACA made The Telecommunications (Customer Service Guarantee) Standard 1997 FN54 which came into effect on 1 January 1998. The standard requires Telstra and Optus to supply a telephone service of voice grade quality within timeframes ranging from 3 days (for sites that already have an in-place connection) to 12 months (where there is no readily available infrastructure and there is a population of less than 200 people). Telstra and Optus are also required to repair faults within reasonable timeframes. In May 2000, the ACA made a new CSG -- the Telecommunications (Customer Service Guarantee) Standard 2000 FN55 -- which commences on 30 June 2000 and will replace the 1997 standard. The ACA also issues quarterly reportsFN56 which detail how Telstra and Optus are performing under the CSG.
In South Africa the emphasis is not so much on universal service in the sense of a telephone in every home as on universal access -- a public telephone within a reasonably accessible distance. This is partly because South Africa's PSTN is less developed, and partly because of the legacy of the former apartheid system which left the vast majority of black South Africans without any such services. Hence South Africa's community telecentre initiative. It is interesting to note that the Federal Government has recently announced a similar initiative: "community technology centres" for 55 regional NSW towns.FN57 In comparison, the goal of Australia's USO regime is a phone in every home and goes further by including the DDSO; also Australia's PSTN is significantly more developed and already covers 96% of the population.
Like Australian carriers, Telkom is subject to monetary penalties for failure to achieve specific quality of service targets. However, it is also subject to monetary penalties for failure to meet its network roll-out targets. Unlike Australia, the South African USF is financed by licence fee surcharges rather than by a percentage of carrier revenue based on the cost of meeting the USO.
Again, like the ACA in Australia, South Africa has a telecommunication-specific regulator (SATRA, now ICA) which also oversees frequency planning, allocation and monitoring. South Africa also has a separate agency (the USA) devoted to ensuring the continuing emphasis on the goal of universal access during the implementation of the country's competitive telecommunications policy. Such an agency is not needed in Australia because of the advanced state of its PSTN, although the ACCC performs a similar role to a certain extent.
Unlike Australia's USO and DDSO which are forward looking, New Zealand's KSO could be described as backward looking. The KSO is designed to maintain the same PSTN coverage as existed when the Government privatised the former state monopoly carrier, Telecom. The Government has, however, launched a Telecommunications Inquiry which is considering, among other things, whether the KSO meets the objective of ensuring all existing and potential users have affordable access to a minimum level and standard of telecommunications services in the light of changing economic, social and technological conditions.FN58
Like Australia's USO and retail price controls, the KSO provides for price controls on phone line rental costs and for the maintenance of parity between city and rural residential customers' line rentals. While the KSO does not provide for a CSG, Telecom does publish quality of service indicators for the residential telephone service. Unlike Australia's USO, the KSO does not provide for the deployment of public telephones.
The KSO does not specifically provide for any other carrier to contribute to Telecom's KSO costs which are indirectly recovered through interconnection charges. Whereas in Australia, each carrier contributes to Telstra's USO costs in proportion to their carrier business.
The United Kingdom's USO is most like Australia's except that the USO obligation is imposed as licence conditions instead of specific legislation and BT's USO costs are not contributed to by any other carrier. Like Australia, the UK USO provides for both a standard voice telephone service in the home and a public telephone service.
While BT is not the sole USO provider for the whole of the UK, the only area for which it is not responsible is that serviced by Kingston in the Hull area; whereas Telstra is currently the sole USO provider for the whole of Australia, although the Government has indicated that this is likely to change with the proposed regional tendering for the USO.
Also like Telstra, BT is subject to retail price controls through licence conditions, and although most of BT's tariffs are now not subject to control, a price cap applies to protect lower and medium-spending customers.
There seems little that Australia can learn from the regulatory and industry experience with universal service in South Africa, NZ and the UK.
Having said that, it should be noted that OFTEL calculated in 1997, and again in 1999,FN59 that the cost to BT of providing universal service is not significant when the associated benefits are taken into account. For this reason no mechanism for the recovery of universal service costs exists in the UK. While the ACA has considered the benefits to Telstra in being the national universal service provider in a recent report,FN60 it was not able to assess these benefits in the time available to complete the report. It did, however, suggest the benefits are tenuous and, when taken together, may not be large. Nonetheless, the ACA should undertake a comprehensive assessment of the benefits to Telstra of providing universal service: it may be surprised by the outcome!
It is tempting to suggest that South Africa, NZ and the UK could learn from Australia by extending their universal service regimes to include something similar to the Australian DDSO. However, it would be clearly inappropriate in South Africa where the goal of universal access, let alone universal service, has yet to be achieved. Similarly, it is not clear that the required network infrastructure exists in either NZ or the UK.
In the UK, OFTEL noted in 1999 that the provision of access to higher bandwidth data services is an unproven market and the circumstances are very different from those applying to basic telephony. In particular, there are high costs associated with roll-out of the product, probably running to billions of pounds if based on ADSL; given the immature state of the market, there are no revenues to cover the cross-subsidy, and as a basic access package is likely to cost more than basic telephony, the numbers of people who find they can not afford it, and therefore need to be subsidised, is likely to be much higher.FN61
It could be argued that the DDSO would not have been introduced in Australia had it not been for the fact that Telstra's ISDN data service was already widely available (covering 96% of the population), if not widely used because of the high usage costs. Indeed, what is the benefit in having universal access to a service which is not affordable?
On the other hand, NZ could learn from Australia's USO regime which has promoted the continued rollout of network infrastructure and reduction of costs compared with the KSO which has concentrated on maintaining the state of the PSTN as it was in 1990, while at the same time allowing Telecom to increase line rentals by up to the CPI each year without the need for justifying the increase (in practice the line rental has consistently been held below the CPI).FN62 While the KSO limits line rental increases, it does not provide any limits on new connection fees which, in rural areas, can be quite prohibitive.FN63
Finally, unlike Australia's USO, the KSO does not include any special provisions for people with disabilities.
Footnotes:
FN1 http://www.itu.int/ITU-D/hrd/vtc/vir-lib/tmat/bplan/ch4/universalservice.html.
FN2 Telecommunications Act 1996, sec 2.
FN3 Sec 5-20.
FN4 http://satra.gov.za/opportunities_telecomact.htm.
FN5 sec 58-61.
FN6 http://docweb.pwv.gov.za/docs/strategy/chap02.html.
FN7 Telecommunications White Paper, The Ministry for Posts, Telecommunications and Broadcasting, March 1996, at: http://docweb.pwv.gov.za/docs/policy/telewp.html.
FN8 Source: GCIS: South Africa Yearbook, 1999 at: http://www.gov.za/yearbook/postel.htm.
FN9 http://www.usa.org.za/more_body.html.
FN10 http://www.usa.org.za/telecentre_body.html.
FN11 http://docweb.pwv.gov.za/docs/strategy/chap02.html.
FN12 In Vision 2000 Telkom committed to adding at least three million lines to the network - a 75% increase - while replacing an additional one million existing lines between 1995 and 2000. The ITU estimates Telekom has exceeded its March 1997 target of delivering at least 250,000 new telephone lines (including 30,000 payphones), but the overall goal still requires the installation of more than 2.3 million lines by the 2000 deadline (extended to 2002 when the Government sold a 30% stake in Telkom to US and Malaysian interests). See: http://www.tiaonline.org/pulse0999-5.html.
FN13 Assented to 4 May 2000. See Government Gazette No: 21154, Notice No 462, Date 20000505.
FN14 The Ministry for Communications, Press release, 11 May 2000, at: http://www.doc.org.za/docs/pr/2000/pr0511.htm.
FN15 Briefing for the Vote Minister: Vote: Communications, Ministry of Commerce, December 1999, ISBN 0-478-23455-4, at: http://www.moc.govt.nz/about/pim/communications/index.html.
FN16 Briefing for the Vote Minister: Vote: Communications, Ministry of Commerce, December 1999, at: http://www.moc.govt.nz/about/pim/communications/index.html.
FN17 Amendments to the Telecommunications (Disclosure) Regulations 1990, Communications Networks Policy Group, Ministry of Commerce, August 1999, at: http://www.moc.govt.nz/pbt/telecom/infodis/infodis-01.html.
FN18 The Proceduralization of Telecommunications Law: Adapting to Convergence, Colin Scott, 1997 (3) JILT at: http://elj.warwick.ac.uk/jilt/wip/97_3scot/.
FN19 Communications Liberalisation in the UK, Department of Trade & Industry, March 1999, at: http://www.dti.gov.uk/cii/telecom/doc6.htm.
FN20 Universal Telecommunication Services: A consultative document issued by the Director General of Telecommunications, OFTEL, July 1999, at: http://www.oftel.gov.uk/consumer/uts799.htm.
FN21 Culture, Media and Sport Committee Inquiry into Audio-Visual Communications and the Regulation of Broadcasting : Beyond the Telephone, the Television and the PC, OFTEL's Second Submission to the Select Committee, March 1998, at: http://www.oftel.gov.uk/broadcast/dcms398.htm.
FN22 Communications Liberalisation in the UK, Department of Trade & Industry, March 1999, at: http://www.dti.gov.uk/cii/telecom/doc8.htm.
FN23 OFTEL Stakeholder Discussion Document, OFTEL, November 1999, at: http://www.oftel.gov.uk/about/lts1199.htm.
FN24 Background Paper on Telecommunications, Department of Trade & Industry, August 1995, Revised February 1997, at: http://www.dti.gov.uk/cii/c16/tactsumm.htm.
FN25 Ibid.
FN26 Telecommunications (Open Network Provision) (Voice Telephony) Regulations 1998, reg 5.
FN27 Background Paper on Telecommunications, Department of Trade & Industry, supra.
FN28 http://www.austlii.edu.au/au/legis/cth/consol_act/ta1997214/.
FN29 http://www.austlii.edu.au/au/legis/cth/consol_act/tpassa1999620/.
FN30 Ibid.
FN31 Telecommunications (Consumer Protection and Service Standards) Act 1999, sec 27.
FN32 Ibid, sec 40.
FN33 http://www.aca.gov.au/consumer/usp_register.htm.
FN34 http://www.austlii.edu.au/au/legis/cth/consol_act/tca1991242/.
FN35 Telstra Carrier Charges-Price Control Arrangements, Notification and Disallowance Determination No. 1 of 1999, at: http://www.dcita.gov.au/nsapi- text/?MIval=dca_dispdoc&pathid=%2fpolicy%2fexstat2%2ehtml.
FN36 Telecommunications Act 1997, Pt 7.
FN37 Trade Practices Act 1974, Pt XIC.
FN38 Ibid, Pt XIB.
FN39 Pt 6 (sec 126-133).
FN40 Telecommunications (Consumer Protection and Service Standards) Act 1999, sec 128.
FN41 http://www.tio.com.au/content_about.html.
FN42 Telecommunications (Consumer Protection and Service Standards) Act 1999, sec 8-92.
FN43 Ibid, sec 19.
FN44 Ibid, sec 20.
FN45 Tendering of the Universal Service Obligation, Media Release 42/99, 6 April 1999 at: http://www.dca.gov.au/nsapi-graphics/?MIval=dca_dispdoc&ID=3705; Government USO decisions break new ground, Media Release 26/00, 23 March 2000 at: http://www.dca.gov.au/nsapi-graphics/?MIval=dca_dispdoc&ID=4883.
FN46 Ibid, sec 17.
FN47 Government USO decisions break new ground, supra.
FN48 http://www.austlii.edu.au/au/legis/cth/consol_act/tsla1997460/.
FN49 http://www.austlii.edu.au/au/legis/cth/num_act/tlasca1999548/.
FN50 Government USO decisions break new ground, supra.
FN51 Telecommunications (Consumer Protection and Service Standards) Act 1999, sec 19A.
FN52 Ibid, sec 54.
FN53 Ibid, Pt 5 (sec 113-125).
FN54 http://www.aca.gov.au/legal/telecom/234-1.htm.
FN55 http://www.aca.gov.au/consumer/CSG_Standard.rtf.
FN56 Telecommunications Performance Monitoring Bulletins, at: http://www.aca.gov.au/publications/performance/index.htm.
FN57 Community Technology Centres for regional NSW, Media Release 51/00, 31 May 2000, at: http://www.dca.gov.au/nsapi-graphics/?MIval=dca_dispdoc&ID=5041.
FN58 Ministerial Inquiry into Telecommunications, Issues Paper, April 2000, section 4.6, at: http://www.teleinquiry.govt.nz/reports/issues/issues-03.html#P273_56503.
FN59 Universal Telecommunication Services - Proposed arrangements for Universal Service in the UK from 1997, OFTEL, July 1997, at: http://www.oftel.gov.uk/uniserv2/contents.htm; Universal Telecommunication Services - A consultative document issued by the Director general of Telecommunications, July 1999, at: http://www.oftel.co.uk/consumer/uts799.htm.
FN60 Estimate of the Net Universal Service Costs for 1998-1999 and 1999-2000, ACA, February 2000, at: http://www.aca.gov.au/consumer/uso/NUSC_Est1998-2000.pdf.
FN61 Universal Telecommunication Services - A consultative document issued by the Director general of Telecommunications, July 1999, at: http://www.oftel.co.uk/consumer/uts799.htm.
FN62 Ministerial Inquiry into Telecommunications, Issues Paper, April 2000, section 4.6, at: http://www.teleinquiry.govt.nz/reports/issues/issues-03.html#P273_56503.
FN63 30% of the installation costs above $3,000. Telecommunications Universal Service Symposium, USOs: The New Zealand Government's View, Hon Maurice Williamson Minister of Communications, at: http://www.executive.govt.nz/93-96/minister/williamson/mws010796.htm.