Universal access and service funds

Many countries have established universal access and service funds (UASFs) that are generally financed from one or more of the following sources:

  • Governments’ general budgets (this is the case in only a small minority of cases, including one of the first funds, Chile’s Fondo de Desarrollo de las Telecomunicaciones);
  • Industry levy, as a percentage of annual revenue, on certain classes of licensees;
  • Various other regulatory sources such as the proceeds of license competitions, frequency spectrum auctions and fees; and
  • Once-only contributions from government, financed by loans or grants from international donors such as the World Bank, which contribute seed funding to assist UASF start-ups in their early years. 117

The UASF is often used for general objectives such as installing telecommunications networks in rural areas. More recently UASFs are increasingly being targeted to particular sectors such as schools.

Although in most countries the majority of UASF funds come from annual operator levies, all potential sources should be considered, particularly where funding of school connectivity is considered.

How the UASF funds are distributed varies from country to country. In some, operators bid to provide service in designated areas. The winner is the operator with the lowest bid, and the amount is then reimbursed from the UASF. In other countries, the UASF is used to reimburse designated operators that deploy infrastructure in targeted areas. In some instances, the UASF is used to subsidize tariffs for specific groups.

In Latin America, many countries have established UASFs aimed at increasing access to telecommunications services in un-served or underserved areas. Some of these funds include specific provisions for school connectivity. When countries review their universal service/access programmes or legislation, they could update the authorizing documents to make it easier and more flexible to provide UASF funding to cover the costs of school connectivity and equipment.

Ecuador’s universal service strategy includes support for providing Internet connectivity to schools, chiefly in areas where there is no existing access. The objective is to provide the majority of schools in the country with Internet connections. The telecommunications regulator ( Comision Nacional de Telecomunicaciones, or CONATEL) is responsible for developing an annual plan that identifies universal service targets for funding from FODETEL, the country’s universal service fund.118 FODETEL has financed a number of school connectivity programmes, including a USD 469,000 project providing broadband connections and free Internet access to 74 schools in the Cantón Montúfar Municipality. 119

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