Indian Broadband Policy and Regulatory Resources

Financing

Countries used to place the responsibility of meeting UAS objectives on the incumbent operator before they opened up and liberalized the markets. The authorities would let the incumbents to use cross-subsidization, deficit charge, or universal service compensation schemes to recover from losses due to US obligations. There were also international funds to realize the USO. Today, with the market being more liberalized and privatized, USO is not only the incumbent’s obligation. There are various financing methods such as industry financed Universal Access and Service Fund (UASF). However, these initiatives have also their vices and there are quite a few examples of abuse and misuse of the fund. There are also ideas such as having specific rural universal service and access targets in exchange for relief from UASF levies or taxes.

This article gives an overview about the Universal Service Obligation Fund of IndiaThe USOF of India has been set up due to higher capital cost of providing telecom services in rural and remote areas.  These areas also generate lower revenue due to lower population density, low income and lack of commercial activity. Thus normal market forces alone would not direct the telecom sector to adequately serve backward and rural areas.

In India, the Universal Service Obligation Fund (USOF) is financed by imposing approximately a five percent levy on operator revenues. Currently is around 8.4 billion USD as per this article, of which 4 billion will be utilized for the National Optical Fibre Network (NOFN).

Country Studies

Toolkit on Universal Access Funding and Universal Service Fund Implementation – African Context

 Financing the Universal Service Provision Fund of Malaysia – This link gives a description of how the Universal Service Provision Fund of Malaysia is Financed.

Links

Financing Universal Access and Service – This chapter addresses issues related to the financing of universal access and service (UAS) and of related ICT infrastructure and service development. 

Fiscal Support: Extending Broadband Ahead of or Beyond the Market – Subsidies are the most commonly used instrument to support universal broadband development ahead of or beyond the market. Subsidies may be financed by government budgets, user surcharges, international grants, and other sources.

 

Articles

Superfast: Is It Really Worth a Subsidy? – Governments around the world are providing multi-billion dollar subsidies to roll out fiber to the home (FTTH) to enable superfast broadband (50 Mbps and above). The premise for this is a belief that superfast broadband brings substantial economic and societal benefits. This paper’s purpose is to examine whether this belief is well found

Survey of universal Service fund Key finding. 2013 – This report estimates that more than one third of the USFs studied have yet to distribute any of the levies collected and very few funds would appear to disburse everything they collect.