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Wireless Broadband Internet Access in Rural areas Session 2: Definition and Scope of Universal Access/Service
Moez Chakchouk
Ministry of Communication Technologie Tunisia Email : moez.chakchouk@mincom.tn
ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Introduction
In the 21st century, affordable broadband access to the Internet is becoming as vital to social and economic development as networks like transport, water and power Dr Hamadoun Tour, ITU Secretary-General.
Reality of rural and remote areas of developing countries: lack of infrastructure, low population density, low economic activities, illiteracy, lack of ICT and information, difficult geographical, environmental and living conditions, etc. Rapid migration of population from rural to urban areas in developing countries causing poverty. Amelioration of living condition and empowering rural and remote areas by ICT. Applicability of emerging ICT technologies and services.
ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Introduction
The digital divide between urban areas of developed countries and rural areas of developing countries are becoming: Wider and Wider! We must strengthen our actions to bridge the digital divide by developing ICT infrastructure in rural areas.
Tunis Commitment
We shall strive unremittingly, therefore, to promote universal, ubiquitous, equitable and affordable access to ICTs, including universal design and assistive technologies, for all people, especially those with disabilities, everywhere, to ensure that the benefits are more evenly distributed between and within societies, and to bridge the digital divide in order to create digital opportunities for all and benefit from the potential offered by ICTs for development.
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Outline
Basic Definitions Universality Policy Implementing Universality Role of regulators Universality trends
ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Basic Definitions
Promoting or maintaining of universal availability of connections by individual households to public telecommunications networks, A practical ICT policy objective (developed countries), Not economically feasible (developing countries). Providing to every person a reasonable means of access to a publicly available telecommunication centres, May be provided by pay telephones, tele-centres, community telephone centres, community Internet access terminals, etc.
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Basic Definitions
Universality policy generally refers to both US and UA The common objective provide or maintain service to those who would not normally be served :
Teledensity Universal Service
Universal Access
People living in rural areas (high cost service areas), Lower income people, People with physical disabilities, etc.
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Basic Definitions
Availability: The Service is available in total geographic territory and especially in inhabited parts of the country through pub lic, community, shared or personal devices. Accessibility: All citizens can use the service, regardless of location, gender, disabilities and other personal characteristics. Affordability: The service is affordable to all citizens regarding three main factors:
People incomes, Overall price levels which in turn depend on costs (technology) and profits (competition), Other factors: price presentation and packaging, payment schemes, credit management, user awareness and value perceptions, ...
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Policy
The success of any universal access/service policy is dependent upon political support at the highest level that recognizes the role of ICTs as a tool for development It is essential that Regulators exist or be established where they do not yet exist, and that their key role in implementing universal access policies and promoting competition be recognized and reinforced. A series of policy and regulatory reform measures can be taken to achieve universal access to ICTs.
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Policy
Fundamental Step: Formulating a national policy that identifies appropriate and realistic universal access/service objectives. Five major objectives of implementing Universality Policies:
1) 2) 3) 4) 5) To promote Ubiquitous Network Society, To promote national political, economic and cultural cohesion, To eliminate disparity between rural and urban areas. To encourage more balanced distribution of the population, To promote economic growth. Define Universality What to Fund? Guarantee the best Quality of Service, Ensure affordable tariffs for all, Implement Universality How to Fund?
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Policy
Universality Policies have to differ from developing countries to developed countries, with regards to seven major factors:
1) 2) 3) 4) 5) 6) Social, economical, political environment, Telecom regulatory environment, ICT Infrastructure development, Market opening and privatization strategy achievements, Efficiency of the competition environment, Geographical difficulties and distribution of population in rural and urban areas, 7) Existing disparity, realization of the Millennium Development Goals (MDGs) and perceived order of need (telecom vs water vs electricity vs housing vs etc.)
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Policy
Scope of Universal Service Provision The European Commission Case (Universal Service Directive 2002/22/EC):
Covers connection to the telephone network and access to services provided over that network
Refers to access at a fixed location (technologically neutral could be wireless), Network connection must support dial-up Internet access, Subject to periodical review.
Directory enquiry services and directories Public payphones Specific measures for disabled users, In addition to some mandatory services, e.g. uninterrupted access to emergency services, operator assistance service, bill control measures, etc.
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Policy
Scope of Universal Service Provision The European Commission Case (Review Report April 2006):
There is no need to change the scope of the US obligations at the time particularly noting that: Access to mobile services is high but competitive mobile markets can be expected to continue to support high access without the need for a special mobile US obligations, Only a minority of households have access to broadband and extending the USO scope to cover broadband at that stage would be costly (governments could however support rollout of broadband through direct government funding),
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Policy
High correlation between network penetration and economic development Increasing evidence of causality Consensus that network development should have high priority in order to achieve economic growth However, Universal Service Obligations (USO) can be sometimes in conflict with objective of economic growth Network Development Network development for universal service?
Prioritise subscribers who needs subsidies who are in rural areas
ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Policy
Provides access to information, which is public good and is essential to all forms of economic activities Provides access to new applications & allows companies to explore new business opportunities, access customers and obtain information about market prices. Provides better access to information that makes markets function more efficiently and raises producer incomes. Provides access to information on the performance of government that helps improve government accountability and governance. Broadband networks are increasingly being used to deliver public services such as financial services, healthcare and evoting.
Broadband in developing countries will follow a similar path, but with much greater emphasis on wireless networks. Expanding affordable access to broadband is a top priority for governments of developed & developing countries.
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Policy
Proposed strategy
First, appreciate the market competition environment (market analysis), Then, determine the market deficit areas/people, and Finally choose the best funding strategy in order to ensure an efficient implementation of the universal policy, including funding issues.
Access deficit Market deficit
Poverty
Connected people
Economically feasible
Intervention required
ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Policy
ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Implementing Universality
Two Options:
Tariffs de-averaging (!!!) Tariffs self select packages
Support
the USO objectives, Profitable when marginal costs are covered, No subsidy required Commercially viable
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Implementing Universality
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Implementing Universality
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Implementing Universality
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Implementing Universality
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Implementing Universality
Access Deficit Charges (ADC): paid by telecom. operators to subsidize the access deficit of incumbents
Spreads burden of financing uneconomic access services across all operators (including competitors), Difficult to calculate access costs; difficult to implement and administer in a transparent and efficient manner, Inefficient (as with cross subsidies), Difficult to calculate benefits of USO provider; can lead to excessive access charges to competitors,
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Implementing Universality
Universality Funds: independently administered funds that collect revenue from various sources and provide targeted subsidies to implement universality programs
Most effective means of providing targeted subsidies to expand or support uneconomic service Potentially the most efficient and most transparent, Work best in expansion of service to new areas if combined with competitive bids for private operators, Some administrative complexity and transaction expenses in establishing fund; some potential for bad governance; difficult to forecast associated costs and revenues.
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Role of regulators
Typical goal: Ensure the provision of telecoms services as needed to meet all reasonable demand by:
Protecting consumer interests (price, quality, variety), Establishing and maintaining an efficient competitive market and providing protection from the market power of incumbent operators, Stimulating investment and economic growth and enabling privatesector market entrants to operate through reasonable access to the facilities of incumbent players, Encouraging existing players to develop and innovate further in markets that are expanded by the dynamics of competition, and Maximizing and securing public interest.
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Role of regulators
Regulators need to balance the Interests of various groups of stakeholders, which are often conflicting, even within each group : Public Interests vs Specific Interests
I want employment I want universal access I want to develop the economy I want increased density I want to comply with WTO regulations I want to max. revenues for scarce resources I want to strengthen our position as a communications hub,
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Public Interests
Consumer Interests
ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Role of regulators
Regulators need to balance the Interests of various groups of stakeholders, which are often conflicting, even within each group : Public Interests vs Specific Interests
I want choice I want the best customer service I want better quality of service I want lowest tariffs possible I want advanced and innovative services I want to access the service everywhere
Public Interests
Consumer Interests
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Role of regulators
Regulators need to balance the Interests of various groups of stakeholders, which are often conflicting, even within each group : Public Interests vs Specific Interests
I want to enter market I want ROI on my infrastructure invests I want to offer converged services I want to offer only services I want to offer low quality for low prices I want to operate in certain regions only I want the freedom to use any technology
Public Interests
Consumer Interests
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Trends
National licence conditions have made mobile communications ubiquitously available, e.g. In Tunisia more than 99% of the population is covered, Access radio network shared: low cost base, Subscriber added at a marginal cost independently of its location, Pre-paid services: low entry price for consumers greater possibility to control costs. Comprehensive national broadband strategies are already in place but until now overall proportion of the population in most of Arab countries using broadband does not fulfil the requirement of a service used by a majority of consumers, Competition in broadband market needs a lot of attention (ULL is not implemented), Broadcasting services need also to be considered in a convergent market.
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ITU/BDT Arab Regional Workshop on Wireless Broadband Internet Access in Rural areas
Universality Trends
Whether the US obligations should be defined with regard to network access rather than with reference to particular services, Whether the practice of requiring the incumbent operator to continue to exclusively fund the USO, as occurs in most of countries, is still appropriate given developing competition, Whether a general adapted taxation mechanism is more appropriate than an universality fund implemented through complicated regulatory reforms.
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