Presentation on theme: "Universal Access Policies ITU-WTO Workshop on Telecom & ICT Regulation Relating to WTO Obligations and Commitments 1-7 December 2004 WTO, Geneva Presented."— Presentation transcript:
Universal Access Policies ITU-WTO Workshop on Telecom & ICT Regulation Relating to WTO Obligations and Commitments 1-7 December 2004 WTO, Geneva Presented by Susan Schorr, Regulatory Officer, Regulatory Reform Unit Telecommunication Development Bureau
ITU BDT Products on Universal Access Trends in Telecommunication Reform 2003: Promoting Universal Access to ICTS GSR Universal Access Best Practice Regulatory Guidelines ITU-D Study Group Question 7-1/1
GSR 2003 Universal Access Regulatory Best Practice Guidelines Designing universal access policies, regulations and practices in order to create incentives for the private sector to extend universal access to communications services. Designing universal access policies, regulations and practices in order to create incentives for the private sector to extend universal access to communications services. Establishing a fair and transparent telecommunication regulatory framework that promotes universal access to ICTs. Establishing a fair and transparent telecommunication regulatory framework that promotes universal access to ICTs. Adopting technologically neutral licensing practices enabling service providers to use the most cost-effective technology to provide services for end users. Adopting technologically neutral licensing practices enabling service providers to use the most cost-effective technology to provide services for end users.
GSR 2003 Universal Access Regulatory Best Practice Guidelines (Contd) Adopting a framework of interconnection rates linked to costs. Adopting a framework of interconnection rates linked to costs. Reducing regulatory burdens to lower the costs of providing services to end users. Reducing regulatory burdens to lower the costs of providing services to end users. Developing an effective regulatory body responsible for implementing policies directed towards assuring the best quality reliable services at the most affordable prices that meet the needs of consumers existing and future. Developing an effective regulatory body responsible for implementing policies directed towards assuring the best quality reliable services at the most affordable prices that meet the needs of consumers existing and future. Promoting competition in the provision of a full range of ICT services to increase access, affordability, availability and use of ICTs. Promoting competition in the provision of a full range of ICT services to increase access, affordability, availability and use of ICTs.
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Definitions Universal Service: policies focused on providing individual household connections to public telecommunication network. Universal Access: policies focused on ensuring that all people have reasonable means to access a publicly available telephone in their community (but not necessarily in their home) through shared use of lines or terminals including public payphones, community telecentres, teleboutiques or community Internet access centres Universality: term used by some to refer to both universal service and universal access All share same goal
Universality Goals Availability Affordability Accessibility Traditionally Implemented By Placing Obligations on Fixed Line Monopoly Operator
Availability and Accessibility Goals Vary Some countries or regions lack services of any kind Some countries or regions lack services of any kind Some countries or regions seek to add advanced ICTs to existing basic services Some countries or regions seek to add advanced ICTs to existing basic services
The Basic Access Continuum, From Voice to Broadband Single Line Voice grade service Access to enhanced emergency services, operator services, and relay services; Equal access to long- distance; touchtone Access to data; minimum role of data speed on phone lines Fully digital system end-to-end Two-way broadband service THE BASIC ACCESS CONTINUUM
Principle Objectives of Universality Policies Allow full participation in the Information Society Promote economic development Encourage equal access by all segments of the population Promote national political, cultural and economic cohesion End differences in access between urban and rural areas
What are Universal Access Objectives For Your Nation? Does your country have a universal service or universal access policy? If not, what objectives would you identify to be included? Why does your country wish to improve access to its citizens? What kinds of services are important? Voice? Internet? Broadband? Others?
Achieving Universal Service or Access Through Monopoly Operators Very few countries have achieved universal service/access goals solely through monopoly operators For this reason, most countries have embarked on sector reform
Universal Service/Access as an Obligation License conditions, e.g. roll-out obligations Cross subsidies Interconnection levies and access deficit charges Universal Access Funds e Basic Access Continuum, From Voice to Broadband
Universal Access as an Opportunity Can regulatory conditions be provided to transform universal service obligations into market opportunities? Could your country use sector reform to achieve universal access?
Sector Reform Is Working As a Tool for Universal Access Mobile is the prime example! More mobile than fixed line subscribers in many developing countries Prepaid makes it affordable Public access, through mobile payphone, re-sale and entrepreneurs is making mobile even more effective SMS even cheaper than voice and is a limited substitute
Mobile Payphones Provided by Individual Entrepreneurs in India, Uganda, Nepal, Cambodia and Nigeria Mandated in Mobile Licenses in South Africa Chosen by some operators as least cost solution in Chile As a business managing a network of small entrepreneurs in Uganda and Bangladesh Informal operations, such as Umbrella People
Rural Market Gap and Competition Competition, or more broadlyMarket Efficiency Gapis the first step in analysis of how to address rural access Question: Are there market barriers preventing rural users from having access to telecommunication and ICT services? Requires an assessment of the state of market liberalization and competition
What do we mean by Market Efficiency Gap? Access today Poverty Geographic isolation Commercially feasible Market efficiency gap Real access gap
Market Efficiency Gap Defined The Market Efficiency Gap is the difference between what markets are actually achieving under current conditions and what they could achieve if regulatory barriers were removed and regulation were used to provide incentives. Source: ITU Trends in Telecommunication Reform 2003: Promoting Universal Access to ICTs, Practical Tools for Regulators
Can You Identify Any Market Efficiency Gaps In Your Country? Are there any regulatory barriers to entry that could be removed to encourage commercial responses? What are your policies on resale? Interconnection? End user tariffs? License fees? VoIP, License-exempt spectrum...?
Universal access/ service: What role for regulators and policy-makers? 1. Set measurable targets 2. Analyze which targets can be achieved through sector reform, especially the introduction of competition 3. Consider the use of Universal Access/Service Funds to provide limited and targeted « smart » subsidies within a competitive framework
Use of Universal Access Funds to Address True Access Gap Basic principles of funds Who contributes? How much? Which revenue? Who manages fund? How to identify projects to be funded?
First Step in creating a Fund Enabling Legislation or policy Define principles of the right to communications access Define objectives and obligations for national telecommunications development Mandate establishment of Universal Service/Development Fund
Enabling Laws and Policies (contd.) Define responsibilities for implementing and administering the Fund Emphasize market-oriented, non- discriminatory principles Establish enforcement and dispute resolution powers
Sources of Contributions to the Fund Equitable contribution by all market participants Fixed percentage of designated revenues Key questions: What revenues should be covered? What revenues should be covered? Should anyone receive special treatment Should anyone receive special treatment Who should contribute? Who should contribute?
Management and Administration of Fund Under control of independent telecommunications regulatory authority Management autonomy Independent budget, separate accounting Regular Audits
Procedures for Funding Allocations Develop an Operating Plan identifying intended projects and targets for an identified period (1-2 years) Projects to be identified through needs assessment identifying locations, populations, socio-economic activities with the greatest needs Use funds for smart subsidiesto launch new universal access projects
Funding Only for Basic Voice or Also For Advanced ICTs? Different Perspectives Some experts recommend limiting funding to basic communications–-public payphones--because these projects will leverage financing for other services, including advanced Some experts recommend limiting funding to basic communications–-public payphones--because these projects will leverage financing for other services, including advanced Other experts argue that citizens need access to ICTs NOW and recommend at least some financing be provided for Internet access through telecentres Other experts argue that citizens need access to ICTs NOW and recommend at least some financing be provided for Internet access through telecentres
Minimizing Fund Expenditures: The minimum subsidy auction Project identification Maximum Subsidy determination Mechanics Project Guarantees Impact of Consumer and Interconnection tariffs on financial self sustainability
Trends In Telecommunication Reform 2003– Includes Detailed Look at Minimum Subsidy AuctionsChapter 5 and Annexes Describes a set of processes and procedures for applying Fund financing to construct and operate new public access telecom facilities in un-served rural areas in developing and least developed countries, based on a minimum subsidy competitive auction mechanism Focuses on public payphones as the mandatory designated service to be provided Other types of infrastructure, service delivery modalities and services, including regional broadband operators, individual lines and telecentres, delivering basic and/or advances services, may also be provided
Trends 2003 Chapter 5 (contd.) Brings together best or "promising practices, based on extensive research and on successful experiences in Chile, Peru and Colombia Within the context of a sector liberalization policy and recognizing the limits of the market, these countries designed market- oriented universal access regimes based on providing incentives, not on imposing obligations Annex 1 of the 2003 Trends Report provides a summary of these experiences
Trends 2003, Chapter 5 and Annexes (contd.) Development of Projects Bidding Process Auctions in Existing Coverage Areas Selected Minimum Subsidy Results Indicative Contents of a Sample RFP Effect of Consumer Tariffs and Interconnection Charges on Financial Viability
Funds Bottom line Funds and Auctions require know-how Funds and auctions can help governments to extend universal access into rural areas There can be many pitfalls if not managed properly Difficult to go it aloneresources like Trends 2003 identify best practices Consider expert help to implement
Universal Access Funds in Your Countryif plan is to create one Will the Fund be used only for rural access? Or also for urban? Is the focus on basic or advanced services? Are projects to receive one-time jump start financing? Are projects expected to become financially self-sustainable?
Promoting Public Access Either Through Funds or Sector Reform Universal Service Funds Can be Used for Payphone Deployment or Telecentres Telecentres and payphones can also be run by entrepreneurs or financed by aid agencies Telecentres can Provide Basic Internet Access, offer Tele- Learning/Health, Job Training and other Community Services
Promoting Public Access Telecentre Success Factors Viable Business Plan Telecentres, to be self-sustainable, need Viable Business Plan Community involvement is key Local, relevant content and applications are crucial Using existing public facilities like schools or health clinics can save costs Staff needed to provide training for all users Gender awareness required for training, location, hours
Competition, Price and Technology Three Keys to Rural Access Are Relevant to Telecentres too! Three Keys to Rural Access Are Relevant to Telecentres too! Competitive bidding keeps subsidy, if any, low Lack of competition for access services will impact financial viability Price of services to end users and from incoming calls can make or break financial viability Technology choice can push forward the envelope of financial sustainability and affordability
The Universal Access Toolkit Part 1: Setting up and administering universal access/service funds Part 2: How to use the funds in conjunction with minimum subsidy competitive auctions Part 3: Public access strategies: Establishment of Telecentres with self-sustainable business plans Available in Trends in Telecommunication Reform 2003
Regulators and Policy Makers shape the framework for access to ICT services Fast emergence of new service issues Mobile voice and new data services Broadband, Wi-Fi, Voice over IP Digital convergence, etc Requiring Regulatory decisions Regulate or not regulate Number of competitors and condition for licenses Access to infrastructure Promoting Universal Access to ICT services by Ensuring stable and attractive investment conditions Encouraging competition for services Promoting development and affordability
Ingredients for a Successful Universal Access Policy Approach Regulatory fairness and certainty Recognizing ICTs as a unique tool for development Commitment to the development of a fully competitive market Clear view of the limits, purposes and targets of direct monetary subsidies Low-cost, adaptable and robust technologies Local community and/or entrepreneurial involvement
Thank You for Your Attention! Susan Schorr Regulatory Officer ITU BDT Regulatory Reform Unit