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Local Presence

Issue

This FAQ explains the obligation on Telstra to maintain a local presence in regional, rural and remote parts of Australia.

1. What is the Government doing to make sure Telstra maintains services to regional, rural and remote Australia?

In November 2002, the Regional Telecommunications Inquiry recommended that Telstra should maintain a local presence in regional, rural and remote areas of Australia. In August 2005, the Minister for Communications, Information Technology and the Arts imposed a licence condition on Telstra to give effect to this recommendation.

The condition includes two key obligations:

• to maintain an ongoing local presence in regional, rural and remote Australia; and
• to have a current local presence plan which sets out the activities and strategies that Telstra will undertake to maintain its local presence.

These activities will be broadly compatible with Telstra's commercial interests and will benefit regional communities in a range of ways, including:

• better access for customers to Telstra’s services and staff;
• better coordination of service maintenance by Telstra;
• better targeting of network and service investments by Telstra; and
• a major voice for regional consumers in the Telstra boardroom and with senior management.

2. Why does Telstra need a local presence in regional, rural and remote Australia?

Telstra needs a local presence in regional, rural and remote Australia to maintain the current level and quality of service and to ensure all Australians benefit from future advances in telecommunications service and technology.

In 2002, the Regional Telecommunications Inquiry found that Telstra’s strong local presence is an important part of adequate telecommunications service delivery in regional, rural and remote parts of Australia.

An effective local presence provides a number of advantages, such as:

• improved direct contact with regional, rural and remote customers;
• improved understanding of, and response to, regional, rural and remote customer needs;
• better allocation of company resources to address regional, rural and remote network issues; and
• provision of a voice for regional, rural and remote issues within the company management structure.

3. What is in place to ensure that Telstra will maintain a local presence in regional, rural and remote parts of Australia?

As of August 2005, Telstra has been required through a condition on its licence to maintain an ongoing local presence in regional, rural and remote Australia.

Telstra must develop and publish a local presence plan which sets out the activities and strategies that it will deploy in fulfilling the local presence obligation. Following Ministerial consideration and approval, Telstra must comply with the obligations set out in the plan.

The licence condition requires Telstra to consult with stakeholders for a minimum of six weeks and have regard to their views when developing the draft plan. Telstra will provide a report to the Government which takes stakeholder views into account and explains their impact on Telstra’s local presence response.

Telstra must renew its plan at least every three years. This will involve consultation with stakeholders including representatives from regional, rural and remote Australia, Telstra’s competitors and the Australian Communications and Media Authority (ACMA).

Telstra must also report annually to the Government and to ACMA on its progress in implementing its local presence obligations. Telstra must outline the effectiveness of its strategies and activities and make a summary of the report available to the public.

The local presence requirement applies to the extent that it is broadly compatible with Telstra’s overall commercial interests, is not unduly prescriptive and does not impose undue financial and administrative burdens on Telstra.

4. When will Telstra’s local presence plan take effect?

Telstra must submit a draft local presence plan to the Minister for Communications, Information Technology and the Arts in early December 2005, 120 days from when the local presence licence condition took effect. The plan will take effect following Ministerial approval.

5. Will the local presence licence condition require Telstra to have a physical presence in regional rural and remote Australia?

The requirement for Telstra to maintain a local presence focuses on outcomes and benefits for regional, rural and remote Australians. It does not seek to tell Telstra how to operate in order to achieve those outcomes and benefits.

The Regional Telecommunications Inquiry report states that local presence could have many manifestations, and that different kinds can bring very different benefits to regional and remote consumers.

The local presence requirement aims to:

• reassure regional, rural and remote communities that an effective local presence will be maintained; and
• uphold Telstra’s right to manage its regional operations without undue pressure and in keeping with its commercial interests.

Representation within Telstra’s corporate structure, functional processes and Telstra’s ability to address regional, rural and remote customer needs are as important as a physical presence in these areas. For this reason, the local presence obligation emphasises a complete range of measures to benefit regional, rural and remote Australia.

6. Does the local presence licence condition tell Telstra what it should do?

The local presence licence condition will be broadly compatible with Telstra’s overall commercial interests. It must not be unduly prescriptive or burdensome, either administratively or financially.

As permitted under the licence condition, the Minister provided written guidance to Telstra in August 2005. In developing its local presence plan, the Minister requires Telstra to include:

• its overall local presence commitment;
• the duration of the plan (not to exceed three years) and a commencement date;
• the activities, strategies and performance measures Telstra proposes to fulfil its local presence obligation during the period of the plan; and
• information on the commercial and competitive environment in regional, rural and remote Australia.

A copy of the Minister’s guidance on the local presence plan can be found by visiting the Department of Communications, Information Technology and Arts Written guidance page.

7. How will the local presence requirements benefit regional Australia? What changes will regional Australia see from the requirements?

The Regional Telecommunications Inquiry report identified a range of benefits that will result from Telstra maintaining a local presence, including:

• improved direct contact with regional, rural and remote customers through on-the-ground sales and service representatives, retail sales outlets and skilled specialist staff in call centres;
• better allocation of company resources to address regional, rural and remote network issues. Telstra will improve its understanding and analysis of local network issues, it will be better placed to identify the impact of network problems and its resource application will be more focused; and
• the provision of a voice for regional, rural and remote issues. This will be possible through investment competition and by focusing management attention on regional, rural and remote business opportunities and the particular needs of the regional customer base.

8. What will happen if Telstra doesn’t comply with local presence requirements?

The local presence requirements are a condition of Telstra’s telecommunications carrier licence. Any breach of these requirements will be a breach of Telstra’s licence conditions and subject to the same penalties as any other licence condition breach.

A breach of a licence condition is a breach of the Telecommunications Act 1997. If Telstra breaches a licence condition it may be subject to civil penalties.

The Australian Communications and Media Authority (ACMA) may also issue a direction requiring Telstra to take specific action to prevent contravention of the licence condition in the future. If Telstra breaches a direction from ACMA, ACMA may take action in the Federal Court, where Telstra may be fined up to $10 million for each breach.

ACMA may also issue a formal warning or direction to Telstra for a failure to comply with licence conditions.

9. Where can I find more information?

For more information on local presence, visit the Department of Communications, Information Technology and the Art's Local presence webpage.

• Document ID: 30282 |
• Last modified: 5 February 2008, 6:23pm