ICT Regulation Toolkit Module 4 Universal Access Module

ICT Regulation Toolkit Module 4 - Universal Access Module & regulatory policies on universal access to broadband 8 September 2008, ITU-D Study Group 1, Geneva Andrew Dymond

Objective of presentation 1. Introduce ICT Regulation Toolkit Module 4 – Universal Access & Service (UAS) 2. Latest trends in UAS, particularly related to broadband services 3. Role of Universal Access and Service Funds (UASFs) and other financial tools 4. Towards regulatory tools & strategies promoting access to broadband services

ICT Regulation Toolkit: Module 4 – Universal Access & Service http: //www. ictregulationtoolkit. org Now ready & accessible for general use q Overview of the UA concepts, regulation of UAS, approaches to policy, programme design and funding q Practice Notes with case examples q Online Reference documents Will be reviewed & revised within the first year

Topics covered 1. Universal Access: An overview 2. Regulatory reform & UAS 3. Overview of approaches to UAS 4. UAS Policy 5. Financing UAS 6. UAS Programme Development & Prioritization 7. Competing for UAS Subsidies 8. Technologies for UAS

Section highlights Chapter 1 – Universal Access: An Overview 1. 1 Concepts of universal access • Definitions & objectives 1. 2 Current status of universal access & service by regions • Telephony & Internet indicators, modes of access, etc. 1. 3 Rationale for a universal access policy • Socio-economics, drivers, market gaps 1. 4 Changing contexts & trends for UAS policy • From monopoly tools to UASFs 1. 5 International developments • WSIS & Millennium Development Goals 1. 6 Integration with other national programmes • Education, e-Government, Electricity & e-Banking / m-Banking

What are the UAS trends? Direction towards broadband …. form of policy still emerging q Telephony coverage US • Due to mobile development, the world is getting covered • Coverage is both commercially and socially essential - for users & operators • UA is a market, US becoming realistic target in many areas • Tariff, low cost handsets and user innovation enables near-US q UA now defined to include ICT • Internet at good speed must be part of the strategy • Educational & Community/public access to Internet & ICT is essential • e-Governance and related programmes essential as demand builders q Broadband access & backbone now a focus • Demand Supply are both important • Increasing number of countries with broadband policies • ICT and Broadband Policy and UAS hand-in-hand • Strategies – incl. pricing, open access, shared infrastructure, special projects

Chapter 2 – Regulatory Reform and UAS 2. 1 Reform first • Many regulatory tools can/should precede or accompany UAS policy • Liberalization, technology “openness”, license reform • Spectrum allocation reform • New look at interconnection & tariffs • Remove monopoly obligations • Timing of UAS policy key 2. 2 Impact & importance of competition on UA • Coverage, service & markets 2. 3 The UA market and how operators are addressing it • Sources of revenue & low ARPU strategies – broadband will follow 2. 4 Regulatory measures to improve UAS • License design & incentives, spectrum & tariffs to promote UAS 2. 5 Enabling regulation for broadband • Market liberalization & unbundling, gateways & national peering • Liberalization of convergence services

Key lessons q Liberalisation & de-regulation have shown the way q Don’t try using tools of liberalisation, such as UASFs, in a non -liberalised market q Competitive market can outpace UAS policy and administrative structures q Focus UAS measures on where really needed & at the right time q Don’t burden industry unnecessarily but create incentive, motivation and collaboration q Even broadband will shape up as a competitively driven movement – should not necessarily be “solution driven”

Chapter 3 – Approaches to UA and US 3. 1 Traditional incumbent obligations • The tools of monopoly era reviewed 3. 2 Competing for subsidies from UAS Funds • First generation (Latin American) & second generation (African & Asian) Funds • The advantages of UASFs 3. 3 Non-central government actors in UAS • Village phone, municipal networks, Public access telecentres & cyber cafés 3. 4 Open access, shared access & ICT backbones • The many ways to tap into or develop existing or new national backbones as enabler of UAS 3. 5 Other approaches and initiatives promoting UAS • Rural cooperatives , small operators, community radio

UASFs – their role & track record Mixed experience, even though the trend is strong Key principles & elements of best practice UASFs: q Competitive tendering - Output based aid (OBA) q Technology neutral, transparent, impartial & fair q UASF programmes developed with industry & stakeholder consultation q Focus on ongoing sustainability q Independent of Government, audited & publicly reported q Moving into broadband – UASFs can have an important role • Broadband more costly and less sustainable than telephony but most funds have difficulty distributing even 1% of sector revenues

UASF good examples q Uganda’s Rural Communications Development Fund (RCDF) • Country covered by mobile signal, public access phones • Pioneer towards broadband – all districts have Internet POPs • Assistance to schools, public Internet cafes & ICT training q Chile Telecoms Development Fund (TDF) & Peru’s FITEL • Telephony success has evolved into ICT targets & broadband • Two installations of fibre-optic networks in the south of Chile q Pakistan’s Universal Service Fund (USF) • Country-wide mobile telephony and broadband access programmes • 42% of operator levies distributed or committed by 2008 q Mongolia’s Universal Service Obligation Fund (USOF) • Wireless voice service for all 330 rural districts • Broadband Internet POPs and public access Internet centres under implementation

What role can UASFs play in broadband access? q Some UASFs now financing backbone & broadband • Chilean fund has financed two backbone extensions & being re-focused under new Information Society Access Policy • Sri Lanka, India & others moving in broadband direction q Fund broadband access pilots & roll-outs • Competitive tendering for technology neutral solutions • Test uncertainties, e. g. demand in rural areas, alternative open access solutions q Mandate infrastructure sharing natural to subsidies • Winning bidders required to build capacity and offer leased lines at commercial rates (e. g. , Nigeria, Mongolia)

Chapter 4 – UAS Policy 4. 1 Universal access & service policy framework • Scope, relationship to National Broadband Policy, separate or integrated, institutional framework, basic policy structure 4. 2 Universal access & service policy development • Sector review & Market Analysis • Policy formulation • Priority of regulatory measures • Financial analysis – what is affordable? • Economic appraisal of policy options • Consultation 4. 3 Legal modifications and regulations • Amendments & detailed regulations

Relationship of UAS to Broadband UAS policy Regional access, spread and growth of Internet services creates demand for broadband Internet services Broadband policy Demand stimulation & supply strategy e-government projects Broadband facilities Converging into one policy? price reduction measures create investment & more opportunity for economic delivery

Chapter 5 – Financial UAS 5. 1 General trends in ICT development & UAS finance • The range of financial instruments available – from regulatory reform and UASFs to targeted fiscal measures, demand support & capacity building through e-Governance, sector budgets, etc. 5. 2 Universal Access and Service Funds • Sources of funds, industry levy principles, appropriate level 5. 3 Institutional issues: managing & organizing a UASF • Targeting commercial viability • Managing the UASF • Avoiding pitfalls • Evaluation & reappraisal of UASF programmes • NGN and the future of UASFs 5. 4 Other approaches to UAS funding • Primarily consideration of PPP issues

Chapter 6 – Programme Development & Prioritization 6. 1 ICT Sector Analysis and Assessing Demand • Sector Review, household expenditures, incoming revenue, Internet, field demand surveys 6. 2 Modeling costs, viability & subsidy analysis • Fundamental estimation of the financial gaps to attract investment 6. 3 Economic impact of UAS projects • Telephony • Broadband ICT impact analysis – New work emerging 6. 4 Prioritization of UAS projects • Qualitative, quantitative, financial ranking based on subsidy requirement, subsidy cost per beneficiary

Chapter 7 – Competing for UAS Subsidies A “how to” on UASF tender design & management 7. 1 Design of the UAS bidding strategy • UAS competitor eligibility • The competition bidding lots • The bidding process & documentation • Large & small project processes 7. 2 Bidding & subsidy distribution process • Publicizing tenders • Bidder meetings • Bid evaluation & award 7. 3 Inspection, payment, monitoring & evaluation • Technical audit, reporting • Review & evaluation

Chapter 8 – Technologies for UAS 8. 1 Technology and service neutrality • Context of current trends and the limits of neutrality 8. 2 Technology choices • Review of the main options 8. 3 Broadband & the implications of using IP • NGNs • Contribution to UASFs • Issues related to substitution for voice and broadcasting • Content issues 8. 4 Terminals • Phones, PDAs & computers 8. 5 Relationship with the environment • Re-use, recycling, alternative power sources • The contribution of ICTs

Should policy dictate technology? q Broadband motivation is causing policy makers & regulators to focus on fibre & Wi. MAX q Suggest operators still the best ones to decide • Role of regulation is to provide vision & incentives • Competitive approach to finance & ownership model q Don’t discount the role of the competitive market • Mobile operators ready for the challenge • Open access as a tool to leverage the commercial sector’s energy

Thank you adymond@inteleconresearch. com www. inteleconresearch. com