Abstract: This week’s Federal budget suggests stability for the USO program to the end of the decade. This is despite the impact of LEO satellite services in regional areas, which the Government plans to incorporate into the existing USO policy framework. 

In our view, this is a lost opportunity for some productive deregulation in the sector. The growing irrelevance of fixed voice and the increasing ubiquity of broadband options such as LEOSat suggest that the USO will become an obsolete and costly drag on innovation. The USO is struggling for relevance in a market that is offering more and more telecommunications options.