Act now to end Telstra welfare scheme

The need to abolish the intolerably opaque and out of date Telecommunications Universal Service Obligation can no longer be ignored after today’s damning Productivity Commissions report, the Competitive Carriers Coalition said.

The CCC welcomed both the Commission’s report and the Government confirmation that it will create a Statutory Infrastructure Provider obligation on the NBN as a first step toward reform.

The Government now should accept that the Regional Broadband Scheme – a new levy designed to subsidise rural NBN services – could not operate at the same time as the TUSO, the CCC said.

“The two schemes are both a form of tax on competitive communications services, raising the cost of people doing business and using basic communications services.”

 “It is abundantly clear that the hundreds of millions of dollars in direct subsidy being paid by consumers every year to Telstra under the TUSO cannot be justified,” a CCC spokesman said.

“The Commission has spent months examining the TUSO and yet it cannot do better than estimate the subsidy per USO service is between $250 and $2800 annually.

“Such imprecision would simply not be tolerated in any other welfare program.

 “But beyond being imprecise, the TUSO is also unnecessary and destructive of competition – it simply does more harm than good.

“Taxpayers expect some value for money and the PC report today makes clear no argument can be made that the TUSO meets this standard.

“The Government should immediately act to end a scheme that now stands exposed as little more than corporate welfare for Telstra.”