Presentation for universal access and service
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1. Universal access and service aims to provide publicly shared or individual access to telecommunications services. It is funded through a variety of means including industry levies, public-private partnerships, and universal access funds. 2. Technology changes have lowered costs and expanded what services should be included in universal access, such as broadband and internet access now. Countries are taking more ambitious universal access goals as a result. 3. Providing universal access helps stimulate economic and social development through widespread communication access, but non-commercial and rural areas still require subsidies or alternative approaches to achieve universal goals.
Presentation for universal access and service
- 1. Universal Access and Service Idongesit Williams PhD student CMI/Aalborg University
- 2. Outline • Concepts • Universal Service for whom • Why Universal Access and Service? • How is UAS funded? • UAS of what? • Trends in reforming UAS • Effect of technology on UAS • Development of UAS • Summary
- 3. 1. Concepts • Universal Access - Refers to a publicly shared level of service, e.g., through public payphones or Internet telecenters • Universal Service - Refers to service delivery at the individual or household level, e.g. typically a telephone in each home - Aside ICTS, we now have Broadcasting • Universal Service Obligation - The obligation of providing universal service, usually granted to the incumbent or the firms with SMP. It sometimes have time frame stipulated in the licence. - Obligations may include equal access, tariffs, quality, affordability
- 4. Approaches to UAS • Continental/regional approach The EU has adopted the term e-inclusion to refer to full access and participation and is particularly conscious of the promises of new digital opportunities and the new risks of digital exclusion • Country approach etc. Developing an information society: WSIS (World Summit on the Information Society) countries include establishing community access points, and connecting universities, schools, libraries, post offices, health centres, and local governments in their UAS approach
- 5. Types of UAS regimes • Traditionally: Granting USO to incumbent (monopoly- competition era) • Competing for funding and subsidy: This led to the establishment of Universal Access and Service Fund (UASF). • Non Government and Community initiatives: PPP, Micro-financing and village phone initiatives, regional telecom operators, Telecentres/Internet cafes etc.
- 6. Policies promoting UAS 1. Facilitation Stimulate demand - Production of public content (e-government) - Stimulation of private content production - Education Stimulate supply - Encourage private investments (e.g. through tax subsidies) 2.Regulation Regulation of infrastructure: - Impose a universal service obligation Regulation of content: - Digital rights - E-payments - E-business 3. Market/Direct Interventions - Build public infrastructure - Fund private infrastructures - Increase public demand
- 7. 2. Universal Access for whom • For everybody or advanced users? • Defined by social groups or geographical areas? • Private, business or public institutions?
- 8. 3. Why UAS Initially focus was on voice telephony, now broadband and the internet, NGNs and even broadcasting (cable tv/radio, satellite etc) Other reasons 1. Widespread access to and diffusion of ICTs are highly desirable for social and economic reasons. 2. Stimulates economic growth/ Information society Important for regional development - Equality/fairness between regions - Between social groups Keywords : Availability, accessibility and affordability of ICT 1. Certain ICTs are now pervasive in our everyday life and they have in turn become pillars of national economies, Making it important for everyone to have access to it. 2. Market Liberalization on it’s own has not been able to close market gaps and Access Gaps due to the challenges of poverty, rural areas and non-viable commercial areas. 3. There is need for sustained and expanded demand and supply of pervasive ICTs especially as technology changes.
- 9. 4. How is UAS funded? Enabling Private funding - Market based reforms: Promotion of competition through open access etc, privatization, commercialization etc - Mandatory service obligations: Same as Universal Service obligation - Leveraging new technologies e.g., mobile - Leveraging new business practices, e.g., pre-paid cards Public funding options - Cross subsidies: Funds from other sources or services used to fund UAS - Access deficit charges: Charges a new competitor pays to the incumbent to make up for the incumbent’s access deficit. The charges are usually added to inter- connectivity charges and call charges terminated at the incumbent’s network. These charges are used to subsidize delivery of telephony to rural areas where the deficits occur - Universality Funds: Funds collected from different sources and used to fund UAS projects - Public-private partnerships: A collaboration between the public and private sector to fund UAS projects
- 10. USAF UASFs are primarily: - A means of financing USAF projects – In the majority of cases financing comes from a percentage levy of operators revenue - An administrative, planning and management entity for UAS programs: UASFs and their programs are often managed by a specially created UASF unit within the regulator or even a separate entity outside of the regulator this often includes certain management principles such as accountability, transparency and efficiency; and A competitive mechanism to award a service contract to the commercial sector to provide UAS services in exchange for subsidies from the UASFs.
- 11. 1. Government general budget (in a small minority of cases, including one of the first funds, Chile‘s Fondo de Desarrollo de las Telecomunicaciones) 2. Industry levy, as a percentage of annual revenue, on certain classes of licensed operators 3. Various other regulatory sources such as the proceeds of license competitions, frequency spectrum auctions and fees 4. Once-only contributions financed by loans or grants from international donors such as the World Bank that contribute seed finance to assist UASF start-up in the early years. Governance: Regulator, Ministry of Communications, Universal And Service Funds (USAF) Source of Financing UASF
- 12. Hold a five minutes break
- 13. UAS as a means of bridging of access gaps Market efficiency gap: A gap within the service reach that is not covered. This gap can be bridged through private service provision so long as the regulator and policymakers provide enabling regulation, ensure a level playing field among all market participants, and create a positive fiscal, business and investment climate. Smart subsidy zone Refers to rural or high cost areas, and low-income population groups that won‘t be reached by the market alone, even if it is an efficient market, or at least not for a long time to come. A smart subsidy is the term used to describe a one-time subsidy that is designed to be results-oriented, does not distort the market, and encourages cost minimization and growth of the market. It helps to kick start a project or service, with the ultimate objective of the program becoming commercially viable, whereas without the subsidy investors might otherwise have been reluctant to invest. Investors‘ reluctance could be due to perceived risk or general lack of capital for the kind of service opportunities that are considered by government to be essential for socio-economic Development True access gap comprises areas or communications targets that are beyond commercial viability, even in instances where initial smart subsidies are given It is a political decision as to if and to what extent to subsidize ongoing service provision to areas and population groups that are beyond the limits of the smart subsidy zone and whether or not to use UASFs to finance such operations. However, even the true access gap can sometimes be bridged with innovative commercially related approaches. In some cases, true access gap areas can be combined with more profitable areas without need for ongoing subsidy. Also, in most countries, the true access gap may apply only to a small percentage of the total population.
- 14. 5.Universal Service of What? • Telephone line • Data connections • ISDN (Integrated Services Digital Networks) • Broadband • Broadcasting (cable TV/Satellite radio etc) Service scope: For a service to be included in the scope of universal access and service certain factors must be considered: 1. In the light of social, economic and technological developments, has the ability to use the service become essential for social inclusion? 2. Are normal commercial forces unable to make the service available for all to use?
- 15. 6. Trends in reforming UAS • Countries are taking more ambitious goals • Technology change and market growth have lowered costs to the level where universal access (UA) to voice services has been achieved or is soon achievable for most developing countries, and a degree of use is affordable for almost all citizens • Adoption of different models and approaches in understanding and incorporating market forces into approaches. • Greater interest in reaching the poor by commercial companies due to saturation of market in cities • Complex interaction with other policies: as ICTs cuts across and becomes pervasive, other policies like broadcast communication etc, come in to play
- 16. 7. Effect of technology on UAS • Developments in technology affects the cost, acceptability and feasibility of services and have a direct impact on universal access and service (UAS). • whether a particular technology is an appropriate solution for UAS and rural areas, and for low income people, depends strongly on these market factors: Competition (the market position of the providers, their service packages and pricing strategy); Demand and affordability; Customer density; and End user terminal distribution and availability. Currently, the broadband revolution led by Internet, IP development , NGNs and the resulting convergence and their effects in society is redefining the technology focus on UAS
- 17. 8. Development of a UAS policy Some guiding questions • Who is the lead ministry developing the policy? • What is the main purpose for developing the UAS policy? (e.g., social harmony/ regional balance; economic growth; global competitiveness; reduction in rural to urban migration; poverty reduction) • What are the aspirations of the UAS (e.g., there can be different emphases on telephony, Internet and broadband – depending on UAS goals already achieved) Practical steps • Sector review – Establishing the current status quo, barriers to growth, potential solutions and UAS strategic options; • Policy formulation – Setting specific objectives, time-bound targets and strategies to achieve those goals; • Regulatory measures – Their priority over other government interventions and their ability to reduce costs of implementing the UAS policy; • Financial analysis – Identifying the required financial resources to implement the policy • Economic appraisal of UAS options – Using strategic socio-economic considerations for policy development, and micro-economic analysis to decide on priorities and sequence within a UAS program; and • Consultation – Several stages of consultation with various stakeholder groups to solicit input, feedback and develop broad buy-in.
- 18. Objectives, Targets and Strategy • Which services (e.g., telephony, Internet, broadband but also directory assistance and access to emergency numbers) should be included into the universal access and service scope • Which specific targets for each of the services should be set; • What main groups should be targeted (e.g., rural population, urban poor, people living in socioeconomic depressed areas) • What other special targets are advisable e.g., schools, libraries, hospitals, etc.); • What timeframe should be set for certain targets to be achieved and what timeframe will the UAS policy cover; • What approach should be used and which strategies employed, covering: – Estimating cost of achieving set targets and whether public funding (subsidies) is required; – Who will provide the funding and how is it collected; -- Who will deliver the services (e.g., operators and service providers, NGOs, entrepreneurs, etc.); and – How will those entities be selected.
- 19. Governance • Who should develop UAS : Primarily in most cases, the Ministry of communications in collaboration with the regulator and other stakeholders. • Who Implements the UAS: The ministry of communications, the regulator, the USAF or any other mandated body
- 20. Financial consideration Policy development should consider the desired outcome and the available financial resources in order to arrive at a feasible strategy. Focus should be on: What is a financially feasible UAS policy, i.e. what is the limit? - Where should the financial resources for a UAS program come from; and - How much finance is required to implement the desired UAS policy and program strategy? There are two ways to estimate the appropriate level of UASF contributions: 1. Policy-driven approach – Determine what scale of subsidy program would be required to meet the country‘s policy objectives and time-bound universal access and service (US) targets. The total cost and subsidy estimates are compared to the total sector revenues. The percentage of total sector gross or net revenues calculated by this method becomes the high level estimate; or 2. Market-driven approach – Determine from a survey or assessment of operator and other stakeholder opinions, as well as from international benchmarks, what operators would accept or could afford as a reasonable contribution. Then develop the UASF program to match this. The actual amounts required from the industry will vary depending on other existing financing sources available, such as government budget allocations, proceeds from licensing and spectrum auctions and development partners.
- 21. Economic Appraisal of UAS Options Key factors to be considered in the implementation stage of UAS policy include: • The total population reached by each project or potential investment; • The expected impact and poverty reduction effects, compared to the vision and objectives; • The regional benefits and equalization in socioeconomic terms; • The commercial viability and sustainability of a program; • Leveraging of private participation; • The subsidy cost per beneficiary; and • The benefit to cost ratio.
- 22. Legal Modifications and Regulations Once a universal access and service (UAS) policy is developed, legal modifications and further regulations are often required for implementation. Typical issues that need to be addressed are: • The legal basis for the chosen financing instrument: collecting a UAS levy from operators and service providers (licensees), using frequency and license auctions proceeds to finance UAS, developing a new licensing regime with attached UAS requirements, or infrastructure sharing, or any other chosen instrument. • The legal instruments to apply selected financing or implementation mechanisms (e.g., set up of a UASF, authorize its management and fund disbursement, new licensing regimes and draft licenses). • Detailed guidelines on UAS policy implementation, UASF objectives or objectives of any other chosen UAS strategy; and • Detailed regulations, guidelines and principles of the UASF management and operation, if a UASF was chosen. The precise amount of legal revision that is required, or additional regulation to be implemented, may vary significantly from country to country.
- 23. Digital Literacy and E- inclusion • E-inclusion is a social movement whose goal is to end the digital divide • It is increasingly important that everyone has the support, confidence, skills and equipment to allow them to use the internet and participate in the digital economy. • In future, UAS may become a question of ―e inclusion, which is the goal of the European Union (EU) declared in the Riga Ministerial Declaration. Einclusion means both inclusive ICT and the use of ICT to achieve wider inclusion objectives
- 24. Summary • UAS is now an evolving concept with the development of new pervasive technologies and the expansion of ICTs into broadcasting and other areas. • Financial approaches to the evolution of UAS is also evolving as the need to bridge the digital divide grows. • More ambitious visions are drafted for NGNs by various countries • NGN and the development of digital economies has led to the concept of e-inclusiveness as a new concept to attaining Universal service