Small telcos offered license and USO fee reprieve

Small telecommunications carriers may soon be exempt from paying carrier license fees or contributing to the Universal Service Obligation (USO) under an initiative announced by the Australian Government today.

Communications Minister Stephen Conroy today announced a Ministerial Declaration - the Telecommunications (Participating Persons) Determination 2011 (No.1) - hailing it a win for the telecommunications regulator and small industry players hampered by "unnecessary regulatory red tape".

Under existing telecommunications laws, all carriers that hold a license are expected to report annual revenues to the Australian Communications and Media Authority (ACMA), which uses this information to determine carrier license charges, USO (Universal Service Obligation) and NRS (National Relay Service) levies.

The USO, as it currently stands, is a fund the Government pays Telstra each year to subsidise those loss-making but essential telecommunication services it provides Australian citizens, such as maintenance of the copper network and provision of payphones.

In the draft determination, the Government proposed that carriers earning under $25 million a year be exempt from being required to contribute to the USO.

Minister Conroy also announced future plans to direct ACMA to scrap carrier licenses for small companies altogether.

This, according to the draft declaration, would save small carriers money but also save the regulator considerable effort.

Of the 194 companies carrying a carrier license in Australia, 170 earn less than $25 million per annum.

The telecommunications and ISP industry has rapidly consolidated over the past decade and many have speculated that an NBN world – especially under the Point of Interconnect (PoI) plan – will favour larger telcos and invariably put smaller players out of business.