Management of Universal Access Funds for Telecommunications Regulatory Board of Cameroon

Module One: The Historical Context of the Development of USAFs

7 – 9 February 2011

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As the telecommunications sector made rapid progress and as evidence became increasingly clear of its key role in socio-economic development, so did the belief that everyone should have access to communication. This formulated into a right to access, just as everyone has a right to the access of water or electricity.

Global Context

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Global Context

• More than 70% of the Worlds’ extremely poor live in rural areas

• When the Governments were the providers of telecommunication services the responsibility of equitable connectivity (including the rural areas) lay with them.

• But with the liberalisation of telecom markets, when operators were privatised, the primary deciding factor in network expansion became profitability.

• Operators would focus on urban areas that offered higher revenue and more profits with limited effort and leave out rural areas with lower income levels, more challenges and higher risks

• As a result policy and regulatory interventions became necessary to assure equitable access to telecommunications.

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Difference between Universal Service/Universal Access

Universal Service (US) • Promoting or maintaining of “universal” availability of

connections by individual households to public telecommunications networks,

• A practical ICT policy objective for developed countries• Not found to be economically feasible for developing

countries

Universal Access (UA) • Providing every person reasonable means of access to

publicly available telecommunications• These could include the provision of pay telephones, tele-

centres, community telephone centres, community Internet access terminals, digital hubs etc.

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Progression from Universal Access to Universal Service

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Global Status of play

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Universal Service/Access Definitions

• “One System, One Policy, Universal Service ” Theodore Vail, President, AT&T (1907)

• “A defined set of services of specified quality, which is available to all users independently of their geographic location and, in the light of specific national conditions, at an affordable price” European Commission (1997)

• “The purpose of making available some telecommunications services of specified quality, and in light of specific national conditions, at an affordable price to those potential users who do not have the service and for whom, not having access to the service would constitute a social or economic disadvantage ” ITU (1999)

• “ A long term objective of making communications facilities available to every member of society on an individual or household basis ” David N. Townsend (2002)

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Universal Service Access Fund (USAF)

• A fund collected, normally from levies, fordisbursement to improve communications in rural areas

• The fund re-distributes a certain amount of finance to operators and, sometimes other parties, to encourage network rollout to economically less-attractive areas

• To create a USAF requires a policy/regulatory framework addressing its goal, scope of activities, sources of contributions, management model etc.

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Birth of USAF

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• Elements of Universal Access or Universal Service policies were already in national telecommunication legislation or telecom policies, particularly in the form of USOs

• Need created for Universal Access Fund primarily due to privatisation in the telecommunications sector

– Policy and regulation framework, legislation and incentives became necessary to encourage operators to connect less-profitable areas/people

• USAFs were first developed in Latin American countries and have provided the basis for development of best practices

• ITU and the global community assisted

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Engagement of the Global ICT Community

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• ITU – Funding and support for projects (e.g. Sengerema, Tanzania)

– Research and development (e.g. ITU publications)

– Capacity building (e.g. Forum on Telecom/ICT Regulation and Partnership in Africa (FTRA) 2009)

– Information portal & research library at http://www.itu.int/ITU-D/univ_access/

– Evaluation e.g. Integrated Rural Development and Universal Access: Towards a Framework for Evaluation of Multipurpose Community Telecentre Pilot Projects Implemented by ITU and its Partners, by Johan Ernberg, ITU http://www.itu.int/ITU-D/univ_access/telecentres/papers/guelph.html

 

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Engagement of the Global ICT Community

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• World Bank– Investments through funding

– Technical assistance through:

o Supporting the UA regime and establishment of the fund

o developing UA policies for a particular context

o designing regulatory and institutional frameworks for funds

o implementing demand studies and field work

o identifying types of projects that would benefit the socio-economic development of the communities the most

o estimating subsidy requirements

o designing tender documents, licenses and contracts

 

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Engagement of the Global ICT Community

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• WSIS– WSIS Declaration of Principals; “The ability for all to access

and contribute information, ideas and knowledge is essential in an inclusive Information Society.”

• OECD (Organisation for Economic Co-operation and Development)– Publications - Liberalisation and Universal Access to Basic

Services: Telecommunications, Water and Sanitation, Financial Services and Electricity

•  Regulatel (Latin American Cooperation)– Capacity-building– Research– Evaluation

 

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Role of CTO

• ITU/CTO Model for Universal Service/Access Policies, Regulations and Procedures

– Part One: USF Policy and Implementation – Part Two: Minimum Subsidy Auctions– Part Three: Telecentre Options and Strategies

• Capacity building

• Research and evaluation

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A Truly African Institution

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AUSAFA (African Universal Service and Access Fund Association)

– Need for AUSAFA was recognised in 2007 when representatives from a number of African USAF entities met in Kenya and agreed that an official association would help them to deliver their individual mandates more effectively through cooperation.

– Established in August 2008 in Malawi

– A declaration was issued to adopt the Constitution of AUSAFA

– The CTO guided the formation of the AUSAFA and provide continued support including its secretariat.

– Aims to foster collaboration and sharing of knowledge between members

 

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Early USAF Adopters

Countries in Latin American were the

first to adopts USAFs in the mid 1990s

• Colombia, 1994

• Peru, 1994

• Chile, 1995

• Mexico, 1995

• Guatemala, 1996

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Source: cia.gov

Source: TopNews.inSource: latinimmersion.com

Source: travelimages.com

Source: cia.gov

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Early African Adopters

South Africa was the first African country to establish a Universal Access Fund in 1997, Universal Service and Access Agency of South Africa

Uganda was also an early African adopter and set up the Rural Communications Development Fund in 2001 which is regarded as one of the African best practice examples

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Source: cia.gov

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Early African Adopters

Nigeria set up the Universal Service Provision Fund in 2003

Ghana set up the Ghana Investment Fund for Telecommunications (GIFTEL) in 2005 which was reconstituted as Ghana Investment Fund for Electronic Communications (GIFEC)

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Source: cia.gov

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Selected African USAFs

Country Fund Fund Administrator/ Management

Year Established

South Africa Universal Service and Access Agency of South AfricaUSAASA

Universal Service and Access Agency of South AfricaUSAASA

1996

Uganda Rural Communications Development Fund RCDF

Uganda Communications Commission UCC

2001

Nigeria Universal Service Provision Fund USPF

Universal Service Provision Fund

2003

Ghana Ghana Investment Fund for Electronic Communications GIFEC

GIFTEC Board of Trustees (independent agency)

2005

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