ACMA - Review of Payphone Policy 2003

The ACA (ACMA's predecessor) conducted a review of payphone policy in 2003. This page contains information relevant to the review, the report of which may be accessed via the appropriate link below. Further information is available from ACMA's Industry Monitoring Section.

To read a summary of the main findings of the Payphone Policy Review click here. The Government's response to the review can be found here.

Payphone Policy Review - March 2004 (PDF 1 mb)
Payphone policy review multi page html format
Media release: Customer satisfaction with payphones is rising-ACA
Submissions to the review
Media release: ACA calls for public comment on payphone policy
Media release: ACA to visit Kimberley and Great Sandy Desert communities for payphone review
Payphone review consultation
Notes from the roundtable meetings with stakeholders

The former ACA conducted a public review of payphone policy to ensure that the provision of payphones under the universal service obligation (USO) continues to be effective and relevant.

The review formed part of the government's response to the 2002 report of the Regional Telecommunications Inquiry. The review examined general payphone policy relating to both metropolitan and regional areas.

Background
The need for a review of payphone policy
Issues to be covered by the review
Review process
How to provide input to the review
Regional Telecommunications Inquiry
Useful payphone reports and studies

Background

The Regional Telecommunications Inquiry reported on 6 November 2002 on whether telecommunications services in regional, rural and remote Australia were adequate and the arrangements that should be put in place to ensure that all Australians continue to share in the benefits of further service improvements and developments in technology. The Inquiry made a number of recommendations in relation to payphone provision, including recommendations 2.11 to 2.14.

On 25 June 2003, in responding to these recommendations, the Government proposed to work with Telstra and the Australian Communications Authority (ACA) to review payphone policy and ensure that the provision of payphones under the Universal Service Obligation (USO) continues to be effective and relevant. To commence this process, on 9 July 2003, the Minister for Communications, Information Technology and the Arts requested the ACA to undertake a public review of existing payphone policy and report to the Minister on its findings by March 2004.

Further payphone-related information on the Inquiry and the government's response can be found here.

The need for a review of payphone policy

Payphone services are provided in a competitive market, supplemented by the government's universal service obligation (USO) policy.

The USO ensures that payphones are reasonably accessible to all Australians regardless of where they live or carry on business, with the universal service provider Telstra receiving compensation for the provision of payphones in unprofitable locations. Telstra's standard marketing plan outlines how it intends to fulfil the USO, and includes details such as the process for applying for a Telstra operated payphone as well as timeframes for connections and repairs.

What 'reasonable access' actually means has not been clearly articulated. It may be assumed that reasonable access to payphones will be provided if Telstra follows its stated criteria for determining in which situations it will provide a payphone. However, this criteria is not stringent and in practice leaves Telstra with considerable freedom to decide whether or not to provide a payphone in a particular location. Rather than become involved in the payphone siting decision making process, the government and regulator instead focussed on the reliability and performance of Telstra's payphones.

Historically the static nature of the payphone market meant this arrangement was adequate. In recent years, however, the environment has started changing rapidly:

payphone use and revenues are declining sharply as mobile phone ownership rises;
total payphones have declined 12 per cent over the past five years;
there are new entrants (such as TriTel) and a competitive market in some areas; and
greater access to telecommunications services is provided through products such as Telstra's InContact fixed phone and Communic8 Pre-paid Home services.

Although there are indications that fewer people are using payphones and that the relative importance of payphones to other telecommunications services is diminishing, payphones continue to play an important role in Australia for some segments of the community.

Terms of reference

In conducting this review, the ACA examined and made recommendations in relation to:

The role of payphones
1. The various services provided by payphones, including convenience of telephone access in public places; access to emergency services; and provision of basic telecommunications access to those otherwise lacking it.
2. The role of payphones today and in future, including for specific user-groups such as low-income groups, remote Indigenous communities, people with disabilities, users without mobile phones and users in areas without terrestrial mobile phone coverage.
The current and likely future structure of the market for services provided by payphones:
1. Number of payphones and suppliers in the market.
2. Geographical distribution of payphones.
3. Revenue and cost structures of payphone provision.
4. Functionality of payphones supplied.
5. Current and likely future market for substitutes and complements.
6. Current state of competition in the payphone market.
7. Level and distribution of demand.
8. Likely changes in payphone demand over time given greater access to substitutes, changing technologies and new services.
The role of the competitive market in payphone provision:
1. Impact of regulation on competition, including:
  1. Effect of price caps on calls from public payphones;
  2. Interaction of the Universal Service Obligation (USO) and the competitive market; and
  3. Benefits of being the Primary Universal Service Provider (PUSP).
2. Performance of the competitive market in addressing community needs, including those of special user groups.
3. Commercial viability of payphone provision in the current environment.
Developing policies for access to the services provided by payphones and appropriate levels of service:
1. Future policy options for access to the services provided by payphones (possibly including the use of technologies and services other than payphones) that is commensurate with community needs while facilitating greater competition and commercial viability.
2. Appropriate arrangements for determining the location of payphones;
  1. Processes for determining optimal numbers and location of payphones; and
  2. Criteria including financial arrangements for installation, resiting and removal of payphones.
3. Appropriate access and service objectives for future payphone provision given current gaps in accessibility and changing supply and demand, including:
  1. Functionality of payphones;
  2. Levels of accessibility for people with a disability;
  3. Levels of accessibility for people in Indigenous communities;
  4. Consumer awareness of reasonable access to payphones; and
  5. Performance and monitoring arrangements.
4. Whether Telstra's policies (as universal service provider) remain effective at providing access to payphone services including:
  1. with regard to the distribution and number of payphones supplied;
  2. with regard to provision of payphones for people with disabilities and remote Indigenous communities; and
  3. whether the criteria and process for installation, resiting and removal of payphones at a particular site are appropriate and sufficiently objective.
5. Performance and monitoring of payphone provision under the USO:
  1. Role of the ACA in performance monitoring;
  2. Level of performance in installation, resiting, removal and repair of payphones;
  3. Level of performance achieved in Quality of Service and appropriate functionality terms;
  4. Current causes of low performance; and
  5. Whether existing arrangements adequately address systemic issues.

Review process

The former ACA reported to the Minister on the outcomes of the review at the end of 2003.

The main form of public consultation was through direct meetings with payphone providers, relevant government bodies, and interested representative groups in September. While these meetings may suffice in many circumstances, submissions may also be made by both organisations and individuals. Submissions must be provided by Friday 10 October 2003, although submissions provided in August and September will help to direct discussion in the meetings with stakeholders.

The former ACA also undertook market research to assess who predominantly uses payphones and why do they use them, so as to determine the role of payphones and the social need for payphones in the rapidly changing environment. The former ACA also collected data from industry about supply and demand of payphones in Australia.

Regional telecommunications inquiry

The Regional Telecommunications Inquiry was set up by the government to report on whether telecommunications services in regional, rural and remote Australia are adequate, and what arrangements that should be put in place to ensure all Australians continue to share in the benefits of further service improvements and developments in technology.

A list of submissions to the Inquiry is at www.telinquiry.gov.au/submissions.html, with electronic submissions able to be downloaded. Submissions that provided comment on payphones were:

Aboriginal and Torres Strait Islander Commission;
Australian Association of the Deaf;
Australian Communications Exchange;
Cape Barren Island Aboriginal Association;
Consumers Telecommunications Network;
Deafness Forum of Australia;
Government of Western Australia;
Grabine Lakeside State Park;
Johnno Lawrowicz;
Kalar Holland;
Payphone Industry Association;
Optus;
Regional Development Council of Western Australia;
Shire of Ngaanyatjarraku and Ngaanyatjarra Council (Aboriginal Corporation);
TEDICORE;
Telstra;
Theo Smarsz; and
Women with Disabilities Australia.

The Inquiry reported to the Minister for Communications, Information Technology and the Arts on 8 November 2002. The Inquiry's report is available at www.telinquiry.gov.au/rti-report.html.

The government's response to the report's recommendations is available on the DCITA website. The responses to the payphone related recommendations are provided below.

Recommendation	Government response	Action
2.11 Telstra should be required to better inform the public about its policies for providing payphones, including ensuring that criteria for providing payphones are clearly and simply stated. Telstra's criteria and processes for payphone installation decisions should be reviewed by the government. The government should establish a clear policy on future payphone availability.	Accept	Telstra will take steps to better inform the public about its payphone policies. The government will work with Telstra and the ACA to review payphone policy and ensure that the provision of payphones under the universal service obligation (USO) continues to be effective and relevant.
2.12 The sites of Telstra operated payphones, together with the numbers of payphones at each site, should be made publicly and readily available. Consideration should be given to including payphone locations at least in local telephone directories in regional areas.	Accept	As in 2.11 above
2.13 Telstra should report as soon as possible to the government on the causes of low levels of performance in meeting payphone repair timeframes, and put forward a strategy for raising performance to an acceptable level, particularly in remote areas and Indigenous communities.	Accept	As in 2.11 above
2.14 The government should review the provision of payphone services to people with disabilities. In particular it should take steps to ensure that competition in the supply of payphones does not impact adversely on access to teletypewriter (TTY) payphones.	Accept	As in 2.11 above

Two other recommendations that are relevant to the review in part are 5.1 and 5.3.

5.1 Telstra should place a high priority on the provision of payphones, or alternative community phone systems, in those remote indigenous communities currently without access to telecommunications of any kind.	Accept	The Government will work with Telstra to ensure it adequately fulfils its obligation to provide payphones under the USO. Through the TAPRIC programme the Government will offer community phones to remote indigenous communities currently without access to telecommunications services.
5.3 There should be more effective data collection and monitoring of telecommunications needs and services in remote Indigenous communities. The ACA should take a leading role in this area.	Accept	The Government will work with Telstra, the ACA and ATSIC, under the TAPRIC programme, to improve data collection on the telecommunications needs and services in remote Indigenous communities.

5.1

Telstra should place a high priority on the provision of payphones, or alternative community phone systems, in those remote indigenous communities currently without access to telecommunications of any kind.

The Government will work with Telstra to ensure it adequately fulfils its obligation to provide payphones under the USO.

Through the TAPRIC programme the Government will offer community phones to remote indigenous communities currently without access to telecommunications services.

5.3

There should be more effective data collection and monitoring of telecommunications needs and services in remote Indigenous communities. The ACA should take a leading role in this area.

The Government will work with Telstra, the ACA and ATSIC, under the TAPRIC programme, to improve data collection on the telecommunications needs and services in remote Indigenous communities.

Useful payphone reports and studies

This part of the website provides links to relevant information that may assist to inform debate on the issues covered in the review. Please send any links that could be added to telephone.service.regulation@acma.gov.au.

Previous ACA reports on payphones

The former ACA published three reports into the provision of payphones.

Special Report No.5: The Universal Service Obligation: Payphones from March 2000 looked at customers' satisfaction with payphones and the availability and functionality of payphones. This report focused heavily on the findings of a survey of people at payphone sites, as well as a series of tests to determine the functionality of payphones.

Special Report No.7: Quality of Service of Telstra Operated Payphones from February 2001 was much more specialised and focused on the functionality of payphones. This report was based on an ACA field study of Telstra operated payphones to test the ability to make different types of calls.

Special Report No.9: The Universal Service Obligation: Payphones from October 2002 explored the importance of payphones, the availability of payphones, and the functionality of payphones. Research was conducted for the last of these issues only, in the form of an audit of 501 Telstra operated payphones in 2001.

ACMA consumer satisfaction survey

The ACMA also conducts an annual consumer satisfaction survey which asks respondents whether they have used a payphone in the last 12 months. However, as the survey is conducted by telephone it excludes a key group of payphone users¾ those without a fixed-line phone at home.

International research

The United Kingdom telecommunications regulator Ofcom published reports entitled Consumers' Use of Public Payphones in November 2000 and January 2003, both of which looked at frequency of payphone usage and reasons for using payphones. The 2000 report also investigated consumers' awareness of and opinion on payphone changes and what consumers want from a payphone. The 2003 report also looked at the situations in which consumers choose to use a payphone in preference to their home or mobile phone, and the impact of increased mobile phone ownership.

Ekos Research Associates published Payphone Use in Canada in February 2003. The study consisted of 1,205 telephone interviews, and as a result, did not include people without a home telephone.

A report by L'Union des Consommateurs in March 2003 called Payphone Use Among Low-Income Canadians provides a good comparison to the Ekos study. This survey was conducted at community organisations and locations where it was expected to find a high proportion of people with low-incomes, including organisations that provide basic needs (eg. food banks, clothing, advocacy), seniors' organisations, disability organisations, and rural organisations.

Government inquiries into telecommunications services

In March 2000 the independent Telecommunications Service Inquiry was established to assess and make a certification on the adequacy of telecommunications services in Australia.

On 16 August 2002 the Government announced a further review of telecommunications services to regional, rural and remote Australia, to be conducted by the independent Regional Telecommunications Inquiry.

Review of Payphone Policy 2003

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