model universal service fund policy procedures and implementation itu/bdt arab regional workshop

© Commonwealth Telecommunications Organisationthe ICT for development experts

Model Universal Service Fund Policy Procedures and Implementation

ITU/BDT Arab Regional Workshop“Visibility of Rural Connectivity”

Khartoum, Sudan, 5-7 September 2004

Presentation by Kojo Boakye

Research Officer , CTO


Summary1. The need for Universal Service Funds2. Fund Mission, Priorities and Objectives 3. Authorising and Enabling Laws and Policies 4. Sources of Contribution to the Fund5. Management and Administration of the Fund6. Procedures for Determining Funding Allocations7. Project Definitions and Criteria8. Proposal Evaluation and Criteria9. The Commonwealth Telecommunications Organisation

(CTO)10. Conclusion


1. The Need for Universal Service Funds

More than 70% of the worlds’ extremely poor live in rural areas and they highlight the need for Universal Access (UA).

Urban focus of ICT expansion is largely due to costs

and risks associated with investing in rural areas.

National digital divides create a need for additional investment mechanisms aimed at achieving UA.

We must not underestimate the need for efficient USFs


2. Fund mission, objectives and priorities (1)

Overriding mission and vision:– Contribute to national economic

development and social well-being– Promote technological innovation in

the telecommunications sector– Promote competition in the

telecommunications market– Establish efficient, self-sustaining

market-oriented businesses


2. Fund mission, objectives and priorities (2)

Practical objectives and priorities:– Provide access to advanced

communications capabilities– Provide universal access to basic

telephone communication– Provide support for economic

development and opportunity– Provide direct support to public and

community service institutions


All key development programmes begin at a high level of national legislation, presidential decrees, or ministerial policy statements

Frameworks to ensure credibility and consistency with other national policies

Use general language, to avoid overly restricting implementation of objectives

3. Authorising and Enabling Laws and Policies (1)



Define principles of the right to communications access

Define objectives and obligations for national telecommunications development

Mandate establishment of Universal Service/Development Fund

Define responsibilities for implementing and administering the Fund



Emphasise market-oriented, non-discriminatory principles

Establish enforcement and dispute resolution powers


4. Sources of Contributions to the Fund (1)

Equitable contribution by all market participants

Fixed percentage of designated revenues

Key questions:– Who should contribute?– What revenues should be covered?– Should anyone receive special

treatment?


4. Sources of Contributions to the Fund (2)

Contribution amounts determined through appropriate market analysis– Needs assessment

Cost analysis– Revenue/demand forecasts and fee

calculations Limited options for “in-kind”

alternatives to direct financial contributions


5. Management and Administration of the Fund (1)

Under control of independent telecom regulatory authority

Management autonomy Independent budget, separate

accounting



Regulatory Agency Board of Directors(Commissioners)

Fund Advisory

Committee

Universal Service

Regulatory Agency Management

Fund Director

Accounting,Legal

Project Managers

Assist. Director

Economics Division

Accounting, Legal



Accounting Standards and Procedures: Contributions

– Payments, Documentation, Certification, Audit

Fund accounts and budgets– Project Fund– Operating Budget– Reserve Fund

Project budgets


6. Procedures for determining funding allocations (1)

Operating Plan– Intended projects and targets for

planning period (1-2 years) Projects

– Activities funded by the USF Concessions

– Licenses, grants, awards to individual applicants to use Fund resources in fulfillment of a Project


6. Procedures for determining

funding allocations (2) Target Objectives

– Interim targets for each category of Fund assistance

– Highest priority typically to basic telephone access

– Allocations based on relative degree of progress toward targets


6. Procedures for determining funding allocations (3)

Socio-economic Priority Criteria:– Locations where economic conditions

inhibit pure market-based solutions– Population with low relative income– Population not integrated with a

centre of development– Scarce and dispersed population– Population with low access to

infrastructure and communications– Historically disadvantaged groups


7. Project Definitions and Criteria (1) Universal Access to basic telephone

services - Availability of public telephones by village - Distance and time parameters - Affordability - Accessibility - Ease of use

Access to advanced telecommunications and information services

- Bandwidth and Transmission Quality - Access to Computers and other devices - Training support


Economic development and small business support

- Access to advance business data and network services

- Business-orientated Internet services Public service institution support - Interactive Multimedia services and

capabilities - Specialised content development

7. Project Definitions and Criteria (2)


8. Proposal evaluation and criteria (1)

Six Criteria of Evaluation

1. Location2. Quality of Service3. Quantity of Service4. Community Benefits5. Implementation Plan6. Cost


8. Proposal evaluation and criteria (2)

Three Stage Process of Evaluation

Stage 1: Pre-qualification

Stage 2: Request for clarification, expansion, or modification of pre-qualified proposals

Stage 3: Evaluation of revised proposals and award of concessions


Model Universal Service Fund Policy and Implementation

A CTO report

With contributions from:

ITU and David N. Townsend & Associates


Model Universal Service Fund Policies and Procedures

Part II: Minimum Subsidy Auctions for Provision of Public Access

Telecommunications in Rural Areas Describes Model processes and procedures

for applying USF financing to construct and operate new public access telecommunications facilities in unserved rural areas in developing and least developed countries, based on a minimum subsidy competitive auction mechanism.


Model Universal Access Policies

Part III: Entrepreneurial Strategies for Stimulating Telecommunications Market

Development Examines option for stimulating the

development of telecommunications markets in underserved areas using entrepreneurial ventures that are supported by a liberalised public policy.


9. The Commonwealth Telecommunications Organisation

The CTO is a 100 year old International Organisation owned by 53 Member Countries and an ever increasing number of Sector Members. The CTO specialises in promoting the use of ICTs for development.


9. Vision

To become the pre-eminent international ICT organisation dedicated to promoting social and economic development in the Commonwealth and beyond by helping to bridge the digital divide.


9. Mission– Offer highest quality programmes for capacity

development, knowledge sharing and information services to member countries

– Deepen, expand and diversify partnerships between governments, businesses & other organisations to reduce global poverty & achieve Millennium Devt. Goals for ICT

– Help bridge the digital & knowledge divide especially in the five key sectors of food & agriculture, education, health, e-government & e-commerce


Membership & market for CTO Service

National Government

Regulator

ICT Service Operators

Commun-ications Ministry

Full membershipSector membership

Industry (supply)partners

PDTcontributorsRegulator

ICT Service Operators

Development (funding) partners

CTORelationships

Telco

Regulator

Industry & development partners

Telcos

Mobile operators

ISPs

Broadcasters


Range of CTO Products & Services (Applied to priority development

areas) Capacity building services

– Training & Consultancy– International & regional events– Country & company specific events– Development programmes

Research & in-country studies Information & Publication Services Consultancy, advisory & recruitment

Flexibility of supply is a key feature


CTO New Initiatives Knowledge and Research: The Impact of

Telecommunications on Rural Livelihoods New Programmes for Training and

Development Tel – Coop Sea Gateway National ICT Road Map CTO Tariff Centre Portfolio of CTO Courses ICT Professionals’ Database


10. Conclusion1. The need for Universal Service Funds2. Fund Mission, Priorities and Objectives 3. Authorising and Enabling Laws and Policies 4. Sources of Contribution to the Fund5. Management and Administration of the Fund6. Procedures for Determining Funding Allocations7. Project Definitions and Criteria8. Proposal Evaluation and Criteria9. The Commonwealth Telecommunications

Organisation (CTO)10. Conclusion


Contact details

Research Officer:Mr Kojo Boakye

26/27 Oxendon Street,London, SW1Y 4ELTel: +44 (0)20 7839

1381Fax: +44 (0)20 7930

4248 [email protected]

www.cto.intwww.cto-ict.orgwww.ictdevagenda.org

mailto:[email protected]

http://www.cto.int/

http://www.cto-ict.org/

http://www.ictdevagenda.org/

model universal service fund policy procedures and implementation itu/bdt arab regional workshop

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