On the farm of the future, everything that could be connected, will be. IoT tech will become as important as today's farm dog, ute, or a reliable tractor, enabling farmers to work smarter and be truly competitive. The future of farming is undoubtedly a mobile one, so it's surprising that communications funding for regional Australians is allocated to maintaining payphones and outdated copper wiring.

USO Payments To Telstra

Every year almost $300 million * is provided to Telstra to maintain its copper wire network and payphones in regional areas:

Total USO payments to Telstra since July 2012

Payment Rates

Between 2012 and 2032, Telstra will receive almost $6 billion in USO payments.

Payment Rates

  • $24,750,000 a month
  • $813,699 a day
  • $33,904 an hour
  • $565 a minute
  • $9 a second

– The Productivity Commission has inquired into the future direction of the telecommunications Universal Service Obligation (USO).

– The USO has long existed to provide access to standard telephone services and payphones on reasonable request to all Australians.

– Demand for standard (fixed line) voice services and payphones has reduced and continues to decline.

– The Australian Government is rolling out the National Broadband Network (NBN).

In the context of these and other changes, the current USO arrangements may not be effective and funding could be spent on initiatives such as the Mobile Black Spot Program.

Mobile Towers That Could Have Been Built

Based on available data **, almost 22% of Telstra’s regional copper services and 9% of payphones have been shut down despite Telstra’s USO funding remaining the same. The total number of regional mobile towers that could have been built with these savings since July 2012 ***:

Mobile Towers

Total Towers

Rate of Increase

Between 2012 and 2032, USO savings could fund the construction of up to 2,385 regional mobile towers

Rate of Increase:

  • 119 towers a year
  • Almost 10 towers a month

The Productivity Commission has inquired into the Telecommunications Universal Service Obligation (USO). The USO currently provides $253 million every year to Telstra to maintain an outdated copper network in regional areas which will be connected to the NBN, in addition to the $44 million Telstra receives each year for payphones.

In its draft report, the Commission found the USO “no longer serves the best interests of the community,” “is no longer fit for service” and “effectively stymies competition”. It also said that it should be “phased out as soon as practicable” in favour of a scheme which gave all Australians access to affordable broadband, including internet-based phone services via the NBN.

Mobile Coverage This Could Have Provided

Based on available data, almost 22% ** of Telstra’s regional copper services and 9% of payphones have been shut down despite Telstra’s USO funding remaining the same. The total number of farms that could have been provided mobile coverage with these savings since July 2012 ****:

Farms

Total Farms

Rate of Increase

Between 2012 and 2032, USO savings could fund mobile coverage for up to 14,547 farms

Rate of Increase:

  • 31,479 square kilometres a year
  • 2623 square kilometres a month
  • 86 square kilometres a day
  • 2 farms per day

There has been a growing chorus for an overhaul of the current funding model, including from Infrastructure Australia, the Australian Competition and Consumer Commission and the National Farmers’ Federation.

USO reform could release much-needed funds for initiatives which increase regional telecommunications competition as well as coverage, such as an ongoing Mobile Black Spot Program, at no additional cost to the taxpayer.

This is a once in a generation opportunity to bring regional telecommunications funding into the 21st century and help close the digital divide for regional Australians.

 

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Tim McPhail

Head of Public Policy

Tim McPhail,
Head of Public Policy

As the Regional Connect specialist at Red Wire, Tim is passionate about improving mobile coverage and choice for regional and rural Australia. Tim also advocates for policies to support digital innovation in agriculture.

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