Indian USO Fund Archives — LIRNEasia

Since 2005, LIRNEasia has been critical of the very high amount (5%) charged from Indian telecom consumers through the operators and then left unspent in government accounts (approx. USD 4 billion at last count). Our criticisms were presented in multiple forms including a book chapter. We made them known to the leadership of the Department of Telecommunications in face-to-face conversations. Most recently, I discussed the harm caused by taxing poor people to purportedly serve poor people and then keeping the money unspent at a UNCTAD meeting on trade and regulation.
On March 22nd, LIRNEasia was invited to present the Teleuse@BOP findings to the staff of the Indian USO Fund and interested members of the Telecom Commission.   It was a great honor to share our findings with this knowledgeable audience, knowing that they make the decisions regarding disbursement of the world’s second largest universal service fund. While the slides that were used are by no means the sum total of the findings from the survey, they are the broadest slice of data presented so far.  The discussion ranged from interpretation of the survey findings to whether or not broadband access should be subsidized, a question triggered by the rather shocking findings about the use and knowledge of the Internet at the BOP in India. The presentation slides can be downloaded here.
The Study of India’s Universal Service Instruments by LIRNEasia researchers  Payal Malik & Harsha De Silva, critiqued the  Indian government’s policy that made only fixed line operators eligible for USO funds: As of today, the government is giving USO fund support to only the fixed line operators offering services in the rural areas. The over defining terms in the law is a bad idea in a rapidly evolving technology environment, though this correction has been suggested it is quite possible that the previous auctions have left huge amounts of rents that have been appropriated by the incumbent. In an industry that manifests the potential for rapid technological change and innovation, such as telecom, an economic analysis of a problem should not focus too narrowly or exclusively on the best use of society’s resources from the standpoint of today’s technology and resource availability i.e. static economic efficiency but should be viewed from a dynamic perspective.