Two surveys of India’s telecom regulatory and policy environments conducted in 2006 and 2008 by LIRNEasia show a dramatic increase in the score for universal service policies since the policy changes effected in 2007. From being ranked lowest among six emerging Asian countries, India now has close to the highest score for universal service policy and implementation in the mobile subsector, the most dynamic and important of all. What is also noteworthy is that the 2006 score for universal service was the lowest among the six policy and regulatory dimensions that were assessed then. By 2008, that unenviable position had been passed to the dimension of management of scarce resources (spectrum). The increase in the USO score in the fixed subsector was 36 percent; and in the mobile sector 64 percent.
An article written by Rohan Samarajiva on Bangladesh’s proposed universal service taxes has been published in The Daily Star, Bangladesh; an excerpt follows. Bangladesh currently has the lowest mobile prices in the world and perhaps the world’s highest mobile growth rate. Pretty good, by any measure. A universal service tax can ruin the business model that has given millions of Bangladesh citizens the opportunity to get connected to an electronic network for the first time and to use telecom services at affordable prices. Instead of solving a problem, it will create one.
Telecompk.net is carrying a multi-part interview with one of the recent and more active universal service funds in the region. Part 1 is here.
June 21 (Bloomberg) — Vonage Holdings Corp. and other providers of Internet-based telephone service must help subsidize services in rural and low-income areas, U.S. regulators said. A rule adopted today by the Federal Communications Commission requires providers of Voice over Internet Protocol, or VoIP, service to contribute 10.
19 December 2005, Colombo: The telecom subsidy mechanism operationalized through India’s Universal Service Fund (USF) has unduly served the interests of the government owned incumbent telecom company Bharat Sanchar Nigam Limited (BSNL). For the disbursement of the USF collections operators were asked to bid for the least amount of subsidy they required to roll out in the rural areas. However, the least-cost subsidy auction favored the incumbent and resulted in the attenuation of competition. Prima Facie the mechanism was transparent, but the auction design restricted participation only to operators already present in the defined service areas…… English Press Release: Indian Universal Service Fund experience shows that open access to backbone is precondition for effective use of subsidies that minimize market distortion Research report: Indian Universal Service Fund experience shows that open access to backbone is precondition for effective use of subsidies that minimize market distortion
LIRNEasia‘s next colloquium is on May 20th at 6:00PM SL Time/2:00PM Copenhagen/10:00PM Canberra/Singapore 8:00PM/5:30PM India/6:00PM Bangladesh/09:00AM Montevideo at LIRNEasia’s premises (SLIDA Campus, 28/10 Malasekera Mawatha) and via live blogging on this web site. Payal Malik & Harsha De Silva will present their progress on the research project titled Diversifying Participation in Network Development: Moving Beyond the Market which is being conducted under this year’s WDR theme–Diversifying Participation in Network Development. The researchers will present their preliminary findings from their review of the current subsidy mechanism for expansion of rural telephony in India. This mechanism is implemented through two instruments: (a)Access Deficit Charge (ADC), which is a surcharge on Interconnection fees to compensate the [primarily] the incumbent for below cost regulated tariffs in the rural areas and; (b) Universal Service Fund (USF), a fund created through a statute to finance network expansion in net high cost rural areas. The disbursement from this fund is made through a competitive least-cost subsidy mechanism.
By Payal Malik In his budget speech the Finance Minister of India promised a release of Rs. 1,200 crores (USD 275 million) for the Universal Service Fund. While it is heartening that the funds are being released and are not being gobbled by the Contingency Fund of India, what is however disheartening is that competition and liberalisation has not achieved its full potential in bridging the rural urban divde and like in the monopoly era one has to wait for budgetary pronouncements for rural telephony to jumpstart. An extract from his speech: Telecommunication is the best way to provide connectivity in urban and rural India. By the end of January 2005, we had achieved a tele-density of 8.