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Net Universal Service Cost papers released for public comment.

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Media Release

Australian Communications Authority


No. 6 of 1999

17 February 1999


"Net Universal Service Cost Papers 

Released for Public Comment

The ACA today released two papers for public comment. They cover some critical elements of the ACA’s asses sment of Telstra’s $1.8 billion Net Universal Service Cost (NUSC) claim for 1997-98, for meeting its Universal Service Obligation (USO) in providing telephone services across Australia.

ACA Chairman Tony Shaw said, “The papers propose values in key areas, as inputs to the USO model used to calculate the NUSC. Adoption of the suggested values would result in a decrease in the cost proposed by Telstra for forward looking technologies and the weighted average cost of capital (WACC), and would mean a significant reduction in the overall universal service cost claimed by Telstra.

“The ACA is seeking industry and public comment on these matters by 11 March 1999 so that it can be confident it has all the relevant information when assessing these aspects of Telstra’s claim. For example, a key issue to consider in relation to the forward looking technology report is whether the recommended technologies and their associated costs are appropriate for USO costing purposes,” Mr Shaw added.

As part of its assessment, the ACA is required to make decisions about the key values used to calculate the NUSC. Forward looking technologies and the WACC are two of the most important values. The ACA commissioned consultants Gibson Quai & Associates and Ovum to develop a paper on forward looking technologies and the Allen Consulting Group to develop a paper on the WACC .

The main objective of the USO is to ensure th at all Australians have reasonable access on an equitable basis to a standard telephone service and payphones, wherever they reside or carry on business. The costs of supplying loss-making services in the course of fulfilling the USO are to be shared proportionately by the carriers.


These two papers are available in PDF image format from the Current Issues section of the ACA website at:



For more information contact:

All media enquiries:

Dr Roslyn Ke lleher, Executive Manager, Consumer Affairs

Telephone: (03) 9963 6939


Dianne Frey, Manager, Communications and Information

Telephone: (03) 9963 6966