Source:
World Dialogue on Regulation
The emergence of next generation networks (NGNs) is already impacting on current market structures with the separation of infrastructure and services provisioning - an obvious example of this being internet protocol (IP) based services. Naturally this raises challenges for regulators in developed telecom markets where this transition to NGNs and take-up of their corresponding services is already taking place. Universal service issues that had been more-or-less settled for monopoly markets and then revisited in a privatised context now need to be reviewed again (including quality of service, emergency services, directory assistance, itemised billing and public pay phone provision).
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BACKGROUND
The issue of funding is at the hub of the preparations for the second phase of the World Summit on the Information Society (WSIS) to take place in Tunis in November 2005. The central elements of this debate are the definition of the protagonists and the most appropriate solutions to attain the objectives proclaimed in the first phase in Geneva, in the year 2003.
In the last two decades the advent of a new vision of goods and services related to information and communication technologies reduced the State’s power as a decision maker. Over the past twenty years, the telecommunication sector has been radically taken on a commercial rationale in which numerous operators wage ferocious competition.
While limited, it would be false, however, to assert that the State no longer has any space to ensure financing for universal access. New mechanisms thus have appeared: universal service obligations included in the concessions and licenses granted to operators, taxes on asymmetric interconnections favoring rural operators and, particularly, universal access funds (UAFs). The latter appears to be one of the most promising of these mechanisms.
Born in 1994 in Latin America, universal access funds have seen a phenomenal expansion in recent years as a consequence of success. The process is simple: the State, in collaboration with local authorities, first identifies needs and divides them into small projects (for example, one tele-centre in each of the ten midsized towns of the country). It then sets them “in competition”: the company that requires least subsidies gets the license to operate.
Presently, these funds exist or are being planned in close on 60 developing countries or countries in transition. Their objective is to enable communication services in the hands of private companies to be established in rural and/or isolated regions, by granting a subvention to cover the costs and high initial investment.
Although the very recent nature of these mechanisms and the variability of the results do not enable an in depth assessment to be made, some of their aspects have proven to be very promising. Firstly, the innovative and original method of allocating subsidies through setting operators in competition, leads to considerable savings. Secondly, the broad applicability of the model, which applies to infrastructure projects as well as to the creation of contents. Finally, the definition of projects by a single entity, makes it possible to have an overall coherent vision at national level.
Based on the paper “The funding of universal access” by Joëlle Carron
Extending ICT networks to under served communities continues to be a challenge for many countries. While universal service initiatives have bridged some of the many access gaps that persist, new technology platforms offer potential to further extend the network to less commercially viable markets - especially in rural and remote areas. This potential, however, requires the context of a supportive regulatory environment that allows for alternative infrastructure delivery of services and effective Universal Service Obligations policies that take existing and emerging technologies and market structures into account.
This paper develops the notion of information society, and how "the current system of global governance greatly determines on a supranational scale, the space available for national governments to fix their national policies".
The author claims that throughout the developing world, monopolies have failed to meet the mandates of universal and affordable service: while privatisation and competition may be necessary conditions to expand access to basic and advanced communication services, they are far from sufficient. The ability of the market to contribute to public interest outcomes of access, affordability, quality and choice of service is dependent on the existence of capacities and resources to implement, monitor and enforce the relevant policies. If these conditions do not exist, as they do not in many developing countries, the adoption of privatisation and liberalisation strategies could be counterproductive. PDF format.
This report analyzes the way in which the WTO and trade agreements have dealt with the telecommunications sector in the past two decades. The "commodity" approach to ICTs has hindered the access to communication and information as a fundamental human right as the private sector gains power through liberalization. Also available in Spanish.
This report focuses on examining the funds that are used to promote universal access in developing countries and emerging markets. It also provides a brief summary of some of the telecommunications funds that are either planned or have been implemented in developing countries. PDF document.
As access to the Internet remains limited in many rural areas in Africa, the United Nations Economic Commission for Africa (UNECA), through its African Information Society Initiative (AISI), is looking at ways to expand online usage, especially in remote areas of the continent. In trying to balance rural and urban access to the Internet, UNECA is suggesting the Universal Access Fund approach, where the telecommunications operators and ISPs (Internet service providers) contribute money in a common fund that is then utilized to provide basic telephone and Internet access in rural areas.
This document by the Economic Commision for Latin America and the Caribbean (ECLAC) states that given the budget constraints faced by the Governments of Latin America and the Caribbean, policies to provide phone lines, computers or Internet access to all homes in the region, which would constitute a genuine "universal service", are unrealistic. The most frequent practice would be to pursue "universal access", by assuring the population's right to obtain ICT services at accessible prices and at a "reasonable" distance from their place of residence or by extending telephone lines to isolated rural areas and providing free Internet access to low-income sectors through community telecentres. This annex, part of a larger report, describes the funding sources and uses made of universal access funds in seven countries of Latin America and the Caribbean. PDF format.
Traditional approaches to telecoms provision in Peru, first a government monopoly, then since 1998, a liberalized competitive market, have made little progress in providing telephony access to Peru's highly dispersed rural areas. The implementation of the universal access fund approach obtained considerable success.
This article analyzes the evolution of telecom access in Ghana after its liberalization of the sector and the adoption of the Accelerated Development Program (ADP), which included the setting of a Universal Access Fund called the Ghana Investment Fund for Telecoms (GIFTEL), originally aimed at building rural infrastructure. Word document.
Uganda's ICT infrastructure strategies (with "fully liberated markets") include network rollout obligations in operator licenses. Uganda is one of the first countries in Africa to implement a universal access fund -the Rural Communications Development Fund (RCDF)- operating on principles emerging internationally as best practice for allocating 'smart subsidies' to private companies. PDF format.
This document analizes the experience and difficulties encountered in Sri Lanka with the implementation of a "universal access fund" by the government aiming to improve rural connectivity. Similar experiences occured in Chile. PDF format.
During the 1990's Chile experienced a rapid growth in telecommunications services resulting in new services that extended countrywide, technological innovation, and prices among the world's lowest. Most rural inhabitants and some urban dwellers, however, continued to lack access to even a payphone. In 1994, the government established a telecommunications fund to mobilize additional private investment to narrow this gap. This study reviews and documents the cost effective approach developed in Chile that has become the international best practice for improving basic access to telecommunication. PDF format.
Beyond the market zone: The funding of universal access
This paper by LIRNEasia examines perceptions of affordability amongst low income telecommunication users in India and Sri Lanka and the effects of changes in service costs on their usage patterns.
At the World Summit on the Information Society (WSIS) in 2003, a group of mainly African countries proposed that a fund be set up – the Digital Solidarity Fund (DSF) – with revenues raised from both governments and private companies. With its very existence dependent upon pledges from developed nations and the private sector, the Fund secretariat is keen to secure these financial commitments during the coming WSIS II in November. PDF format. November 2005.
The reduction of the digital divide is, in itself, a global public good and consequently, its funding must be ensured supportively by the entire international community. The path to achieve this objective is, in particular (but not exclusively), through an especially promising mechanism: that of universal access funds. For the international community, this is on the one hand to encourage States to establish such funds, and on the other, to study the possibility of establishing a universal access fund on a world scale. PDF format.
This draft paper by APC states that many countries have established Universal Access Funds to channel finance for ICTs into under-served areas but these do not always integrate with mainstream development projects: the terms of reference of Universal Access Funds should be broadened to include financial support not only for network extension in under-served areas but also for capacity building, content and applications development, free and cost-effective software, language development, mainstreaming ICTs with development strategies. An ICTD Agency should be established to oversee, coordinate and facilitate these tasks and administer the Universal Access Fund. Word format.
This discussion paper looks at ways of expanding access to ICTs and so bridging the digital divide. Acknowledging the "market efficiency gap", it advocates a greater focus on universal access programs which would have specific pro-poor aims. PDF format.
This note provides an update on the experience gained by universal access funds and their licensees together with the actual record of achievements in the countries that have implemented these programs. The experience is reviewed from two perspectives: first, whether government targets to serve remote and low-income communities are being achieved; and second, whether the funds have been effective in catalyzing market-oriented and commercially sustainable service provision in the long run. PDF format.
The first part is a critique of the debates and work on financing so far conducted by the WSIS. The second part focuses more on proposals and aims to give a certain number of inputs to the WSIS debate, especially on the issue of international public financing or official development aid. PDF format.
The TFFM was established by the UN Secretary General to review financial mechanisms for ICT for development. This is the final report, released November 2004, in which the universal access approach is reviewed among other mechanisms. PDF document.
Universal access and service: Background information
This collection of papers and reports analyze "universal access", as the right of any person or organization to sipply programs and content services at non-discriminatory terms and "universal service", as the technical connection of every residence, institution, and business establishment at minimal or fair cost.
The Telecommunication Development Sector of the ITU has a policy mandate on Rural Development and Universal Access (set at the World Telecommunication Conference in Malta, 1998).
This document is part of a series of Conference Papers on ICTs in 2000. Participants expressed their views and analized national experiences of "universal access" policies. PDF document.
This paper outlines some of the key policy concerns around access to the information infrastructure. In particular, it examines issues of access from social as well as technical perspectives.
The Universal Access Project grew out of the Information Infrastructure (DIPCII) project in 1996, at the University of Toronto with the purpose of conducting in-depth research on the topic of universal access to networked services in Canada. Although the project focused on the circumstances that define and impact the Canadian situation, the papers and articles that can be found here (such as "What do we mean by 'Universal Access'?: social
perspectives in a Canadian context", by Andrew Clement and Leslie Regan Shade) also provide a valuable insight into the general notion of "universal access" and international information infrastructure projects.
APC Africa Monitor
Although the use of ICTs has grown rapidly from a low base in developing countries (particularly in Africa), this progress is not keeping up with advances in the more developed world. And by their very nature, the governments of low-income countries find it hard to prioritise spending on ICTs access over more pressing demands like health care. This page collects news, information, resources, events, and the names of organisations working in access.
