universal service


It has been a long time coming, but finally the universal service contribution as a percentage of adjusted gross revenue (AGR) looks certain to be reduced from five percent to three percent. The last time we wrote about this was in 2009, when the Finance Ministry stopped it. But, of course, nothing is ever so simple. At the same time TDSAT has brought a whole lot of new revenue elements within the definition of AGR. That will get appealed and so on.
One does not expect a simple assignment in a course to yield a news story that is distributed by a news service, but that is what happened at the broadband course we taught 28-31 March in Nagarkot, Nepal. The assignment required the team members to, inter alia, Assess the likelihood of success of the following elements of the Broadband Policy Draft of the NTA, by assembling evidence on the past performance of the Rural Telecommunications Development Fund (RTDF) (including disbursement efficiency (i.e., what percentage of money was spent within a defined time period) The extraordinarily low disbursement rate caught everyone’s attention. Given the presence of journalists in the course, it was not surprising that it made the news too: The government has spent only 2.
Parvez Iftikhar will be amused that I am proposing a fund, after objecting to his favorite Universal Service Fund. But that is how the policy game gets played. We look at something that does not work at all or produces more bad outcomes than good (government-owned telcos with universal service obligations in the old days; government-owned media organizations now) and propose a solution that will reduce the harm (universal service fund for telecom; public media content fund for media). Then we see how the solution works and propose sunsetting it or shutting it down if it has been hijacked by nefarious interests. Deng Xiao Ping called this crossing the river by feeling the stones.
Usually one has only the time stipulated in the consultation paper to prepare a response. In this case, the Chair is giving extra time to intervenors to get organized. Telecom Regulatory Authority of India (TRAI) chair Rahul Khullar on Wednesday said the authority would come out with a consultation paper on broadband next month. The objective of the broadband consultation paper would be to revisit the broadband target identifying right broadband technologies, involving private and public participation, and achieving new milestone in a cost-effective way. Speaking at an ASSOCHAM event today TRAI chairman said India needs new policies in place to achieve the goal set by the new government.
Not the most perfect summary, since I did the interview with half my mind on the need to get to the airport in time for my flight out.
Governments like subsidies. We do not mind, as long as they do not harm competition and are deployed intelligently. One big complaint we had about the Indian Universal Service Fund was that it was not being used (as was the even bigger fund accumulated by Brazil). The Indian government responded with a USD 4 billion plus plan to roll out fiber to village cluster level. That will be among the policy initiatives that will be discussed at ITU Telecom World Forum, 21 November 2013 in Bangkok.
We have been working with the Pakistan Telecom Authority, the Pakistan Universal Service Fund and operators to achieve universal service in that country. Universal service means a phone for everyone. But according to this report there are people in Pakistan who will kill barbarically to prevent this goal from being achieved. A young mother of two has been put to death in Pakistan for possessing a cell phone, Opposing Views reported on Thursday. Arifa Bibi was executed three months ago, on July 11, after a Pakistani tribal court sentenced her to death by stoning.
The money comes from everyone with a telecom connection in the US. And the government has trouble pushing it through. Five billion USD is a lot of money to keep unspent. Here, we’ve been griping about India’s USD 4 billion and Brazil’s USD 4 billion plus. The E-Rate program has been faulted for inadequately allocating money in the fund, which is provided through a tax on consumers’ phone bills, a monthly charge between 50 cents and $1.
The big unspent piles of cash in the Brazilian and Indian universal service funds are well known. Less well known are the under-performing funds in small countries. Nepal is one. Having the money extracted from mostly poor customers in one of the poorest countries in the world, an LDC, is particularly offensive: While he vowed to break the trend that prevailed so far, Jha also said he has already started groundwork to utilize Rural Telecommunication Development Fund (RTDF) for expanding fiber optics network so that everyone could have access to broadband Internet service and none remain deprived from benefits of advancement in the field of telecommunications. According to the officials, NTA presently has Rs 5.
A short piece I wrote on my own time (IDRC is subject to Canadian government restrictions against any expenditures of Canadian funds in/for Myanmar) was just published in English in the Myanmar Times. I am hopeful the Bamar translation will also be published. The text is below: In 2010, I worked on a section of an ITU report about information and communication technologies in the least developed countries (ITU, 2011). Analyzing the countries that were at the bottom of the league tables in telecom, I found to my unhappiness that Burma was one before the last in mobile telephony. Hearing that N Korea was reaching 1 million active connections by end 2011, I checked the data again.
The program we talked about few weeks back has been announced. It will spend USD 4.5 billion a year to connect 20 million Americans to broadband. In an effort to expand broadband Internet service, the Federal Communications Commission on Thursday approved an overhaul of its fund that subsidizes rural telephone service, turning it into one meant to offer broadband service to the millions of Americans who lack high-speed connections. The plan could lead to higher fees for consumers on their telephone landlines because the commission also approved changes in the complex compensation system by which telecommunications companies pay one another for completing or carrying calls on one another’s systems.
It’s always a challenge to decipher the special language of evaluation reports, but this para in the recent evaluation report on the ICT activities of the World Bank does seem like an indictment of universal service programs. 4.28 Equity and integration of marginalized groups have been more effectively supported by Bank support for ICT policy and sector reform than by operations specifically designed to achieve these goals. ICT operations that supported reforms to introduce competition into the sector, when successful in supporting those reforms, have had significant impact, especially in access to cellular telephony services. This increase in overall access has had a spill-over effect of providing access to the underserved.
Two years after our research was cited in a presentation by Scott Wallsten to Congress to support his argument that the US should adopt least-cost-subsidy auctions and I condemned the inefficient ways of US universal service fund disbursements at an event attended by senior FCC staff, the change is done: The US will use auctions. Can we claim direct causal responsibility? No. But did we do what catalysts do? Yes.
The results of the newest TRE survey conducted by LIRNEasia are out. We started the survey since before the start of LIRNEasia and have improved it since. The results were released in Dhaka, Bangladesh, at a well attended media event on 12 May 2011. The centerpiece was the sector performance report on Bangladesh by Faheem Hussain, Ph.D.
We expressed skepticism when the Labor Party first announced it. We are pleased it is being cancelled. The previous Labour government hummed and hawed about this rural-urban “digital divide”. Eventually, in 2009, it proposed levying a 50p tax on every fixed telephone line in the country: the proceeds were to be given to BT to allow it to connect even the remotest hamlets by 2012. The new coalition administration abandoned that plan, ditching the tax and pushing the target date back to 2015.
I was invited to conduct a discussion at the Cabinet Office in Brasilia with senior government officials driving the Brazilian Broadband Policy that will shortly be announced. Representatives of the relevant ministries, ANATEL the regulatory agency, the public telecom operator and a local think tank participated in what proved to be a lively discussion. Given the policy was almost fully formulated, I decided to focus on performance indicators, a subject I was working on for both UNCTAD and one which had preoccupied me since the time I was a regulator. It is also a subject that LIRNEasia has developed considerable expertise in. My guess was correct.