Revitalizing Universal Service Funds to Promote Inclusion | IGF 2023

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The Giga initiative, a global collaboration between UNICEF and ITU, aims to connect schools worldwide by 2030. This is achieved through a multi-stakeholder approach involving the Ministry of Education, Ministry of ICT, private sector, and civil society organizations to ensure transparency and inclusivity in internet access and digital inclusion efforts.

Giga has successfully reduced connectivity costs in Kyrgyzstan by 43% and in Rwanda by 55%, resulting in significant financial savings and increased internet speeds.

This highlights the importance of effective resource management in improving connectivity and reducing costs.

Revitalizing Universal Service Funds (USF) is crucial for enhancing school connectivity. Reforms in Brazil’s USF have unlocked $675 million for school connectivity, with Giga securing an additional $1.7 billion in financing.

This emphasizes the need for appropriate policy frameworks to reduce inequalities in education.

Engaging various stakeholders and promoting collaboration is vital for progress in internet access and digital inclusion. Giga’s involvement with multiple ministries facilitates effective communication and coordination.

The diverse experiences and perspectives of stakeholders enable addressing complex challenges and creating a common language based on evidence and facts.

Understanding underlying technologies and their implications is essential for lowering internet costs. Giga empowers stakeholders by providing knowledge and insights for informed decision-making.

Effective contract management ensures the involvement of small operators and equitable participation in the connectivity landscape.

Giga emphasizes the importance of linking contract management to connectivity status for efficient payment processes.

In conclusion, the Giga initiative emphasizes transparency, stakeholder involvement, resource management, collaboration, and understanding of technologies to achieve global internet access, digital inclusion, and improved connectivity.

By leveraging diverse expertise, Giga aims to foster productive partnerships and create a connected and inclusive digital future.

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The analysis examines various topics related to internet access and digital inequality. The GIGA project is highlighted as a cost-effective solution for improving internet access in schools. The project has helped in reducing the cost of schools by involving small providers who can offer more affordable options or better access to schools located near communities.

This initiative aligns with SDG 4 (Quality Education) and SDG 9 (Industry, Innovation and Infrastructure).

Another important concern raised in the analysis is the concentration and monopolization of online platforms. This issue not only affects carriers but also content creators.

The dominant position of certain platforms has led to a decrease in competition and options for both users and content creators. These concerns align with SDG 10 (Reduced Inequalities).

The analysis also discusses the misuse of Universal Service Funds (USF) in Paraguay.

It is stated that these funds have been used to acquire surveillance and biometric technology, which have been deployed in the streets of the capital and other cities. This raises concerns about privacy, surveillance, and potential misuse of funds. The misuse of USF in Paraguay is seen as a violation of SDG 10 (Reduced Inequalities) and SDG 16 (Peace, Justice and Strong Institutions).

Private and public sector financing is highlighted as a factor that may influence the costs associated with entering the ecosystem for community networks.

The analysis mentions different tiers of investment economics, suggesting that the availability and accessibility of financing can play a crucial role in determining the success and sustainability of community networks. This topic is linked to SDG 1 (No Poverty) and SDG 10 (Reduced Inequalities).

There is uncertainty expressed about a one-size-fits-all model or approach being applied to community networks.

The argument presented suggests that different communities have unique needs and challenges that cannot be addressed effectively by a single approach. The analysis calls for a more tailored and context-specific approach to community networks, which aligns with SDG 10 (Reduced Inequalities) and SDG 4 (Quality Education).

The analysis also discusses the challenges faced by community networks in taking operational ownership.

Specific reference is made to CowMesh, a community network in India, to illustrate the challenges faced in transitioning from external support to community-driven ownership. This highlights the importance of community engagement and empowerment for the sustainability and success of community networks.

The topic aligns with SDG 1 (No Poverty) and SDG 11 (Sustainable Cities and Communities).

In addition, the analysis raises concerns about defining and understanding what the internet means for different communities. It highlights the need for a common understanding and language when it comes to concepts such as hypertext and hyperlinks.

This indicates a potential gap in digital literacy and the importance of ensuring equal access to knowledge and understanding of internet-related concepts. This topic relates to SDG 4 (Quality Education) and SDG 10 (Reduced Inequalities).

In conclusion, the analysis sheds light on various aspects of internet access and digital inequality.

It highlights the GIGA project as a cost-effective solution for bringing internet access to schools and raises concerns about the concentration and monopolization of online platforms. The misuse of USF funds in Paraguay, the influence of private and public sector financing on community networks, the challenges in community networks taking operational ownership, and the need for a common understanding of the internet are also discussed.

Overall, the analysis emphasizes the importance of addressing digital inequality and ensuring access to affordable and equitable internet connectivity for all communities.

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Global connectivity can be achieved by addressing coordination and access to capital. The issues surrounding connectivity are not merely technological but are also related to the coordination of efforts and access to sufficient capital. Once these two problems are effectively solved, broadband access can increase on a global scale.

This suggests that improving coordination and ensuring access to capital are crucial steps towards achieving global connectivity.

Blended finance plays a critical role in building broadband networks in remote areas. In Europe and the US, blended finance is commonly used to subsidize telecommunications.

However, in emerging markets, the challenge lies in determining who should bear the costs and how much subsidy is required. One positive development is that as the cost of network construction decreases, less subsidy is needed. This highlights the importance of blending finance to bridge the gap in remote areas and make broadband access more accessible.

Governments can extend the reach of broadband access by providing subsidies and extensions around anchor institutions such as universities and hospitals.

This approach helps pull the distribution of backhaul into new areas, making data access more affordable in previously underserved communities. The presence of anchor institutions can effectively extend the access of broadband services.

It is argued that broadband access should be considered a commodity that is accessible to all, rather than a luxury.

Many parts of the world still regard data as a luxury item. The goal should be to make data a commodity that people can access anytime and anywhere. This approach aligns with the Sustainable Development Goals of promoting industry, innovation, infrastructure, and reducing inequalities.

Universal service funds are commonly utilized by governments worldwide as a source of capital for market investments.

These funds play a critical role in making capital available for broadband projects. By utilizing universal service funds, governments can support market investments and contribute to achieving the goals of industry, innovation, and infrastructure.

The cost of establishing networks and providing broadband services can be significantly reduced through coordinated builds and subsidies.

Coordinated builds, which involve constructing various areas together, are more cost-effective than doing so individually. Additionally, subsidies play a role in offsetting the costs of establishing networks. It is estimated that subsidies typically account for only 10% to 20% of the total cost.

Public policy plays a crucial role in determining how different geographic areas, based on their economic buckets, are serviced.

Areas with solid economics are usually serviced, while areas with marginal economics require access to long-term capital. Moreover, areas with insufficient economics need subsidies from Universal Service Funds to bridge the gap. This highlights the importance of public policy in ensuring universal broadband access.

However, higher interest rates are causing delays in global construction projects, particularly impacting emerging markets.

The increase in interest rates worldwide has contributed to these delays, presenting challenges for the progress of infrastructure development, especially in emerging markets.

To manage high capital costs, there should be a focus on reducing the cost of service delivery.

It is important to strike a balance between capital and labour, as higher labour costs in markets like the UK and the US can significantly increase the cost of building infrastructure. By finding ways to reduce the cost of service delivery, the challenges posed by high capital costs can be effectively managed.

Lower labour costs in emerging markets have the potential to contribute to delivering affordable revenue per user (ARPU).

The affordability of broadband services is a crucial factor in achieving widespread adoption and usage. The lower cost of labour in emerging markets can help reduce the overall cost of delivering ARPU in the desired range of 10 to 15 dollars.

In conclusion, global connectivity can be achieved by addressing coordination and access to capital.

Blended finance, subsidies around anchor institutions, and the provision of universal service funds are some of the strategies that can be employed to expand broadband access. Coordinated builds, public policy, and efforts to reduce the cost of service delivery also play important roles.

However, challenges such as higher interest rates and high capital costs must be tackled. Overall, achieving global connectivity requires a comprehensive approach encompassing various factors and stakeholders.

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Universal service and access funds, established by regulators worldwide in collaboration with telecommunications companies, have been in existence for over 20 years. Originally intended to subsidise fixed fiber networks, these funds have had mixed implementation and impact. While some have been well-administered, others have been misused for purposes unrelated to network expansion, leading to a lack of accountability and hindered progress in reaching underserved areas.

With approximately 2.6 billion people still offline due to inadequate network coverage, there is a pressing need to review and find new ways of implementing universal service funds.

One proposal is to diversify fund usage, directing them towards initiatives that address specific connectivity gaps, such as connecting women and girls, or supporting internet exchange points and community networks.

Jane Roberts Coffin argues for a complete reboot of these funds, advocating for a fresh approach to implementation and distribution.

She suggests expanding fund usage to target specific connectivity needs, citing successful examples like Argentina.

The role of Ofcom, a regulatory body, is also discussed. Ofcom focuses on creating market conditions for network providers to thrive, rather than providing direct funding.

Jane appreciates Teddy Woodhouse’s explanation of Ofcom’s function.

Challenges may arise when community service organizations (CSOs) work with regulators. Jane raises concerns about this and seeks advice on how CSOs can effectively collaborate with regulators and influence policy decisions.

This highlights the importance of productive partnerships and dialogue between CSOs and regulatory bodies.

In conclusion, the implementation and impact of universal service and access funds have varied greatly. Reviewing fund usage, expanding their scope, and fostering collaboration between CSOs and regulators are vital in addressing global connectivity challenges.

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Universal Service Funds (USFs) play a crucial role in advancing network connectivity in Africa. Currently, 37 countries on the continent have established USFs. However, challenges exist regarding the ownership and sustainability of USF projects.

In many African countries, community networks, which are considered complementary access models, face obstacles when it comes to accessing USFs.

Due to a lack of recognition, community networks are unable to benefit from the funds available. Advocacy efforts are being made to remove the clause that exempts community networks from making contributions to USFs. A successful example of this is seen in Kenya, where the removal of this clause has allowed community networks to benefit from the USF.

Regulatory experiments in Kenya have proven to be successful for community networks.

The country’s regulator has taken steps such as developing a community networks service provider license and has plans to establish a hundred community networks. These efforts serve as examples of successful community network initiatives and highlight the importance of supportive regulatory frameworks.

Civil Society Organizations (CSOs) play a crucial role in advocating for community networks.

They are actively involved in raising awareness, building capacity, and providing technical assistance. CSOs also have the responsibility of helping regulators understand how to effectively support community networks. Through their efforts, CSOs contribute to the creative regulatory solutions and awareness building necessary for the success of community networks.

Patience and resilience are emphasized as necessary qualities for CSOs engaging with regulators.

Building sustainable relationships with regulators takes time and requires perseverance, as evident from the experience shared by Josephine’s team.

Collaboration and partnerships with existing stakeholders are highlighted as essential for effective advocacy for community networks. By leveraging resources from other countries and regions, collaborations can bring about positive outcomes.

The UK Digital Access Program’s collaboration with the Kenyan regulator is given as an example of such partnerships in action.

The importance of utilizing existing resources, experiences, and advocacy efforts is stressed. Instead of starting from scratch, teams should build on the knowledge and expertise already available.

The collaboration with the International Telecommunication Union (ITU) is mentioned as an example of utilizing existing resources for the benefit of community networks.

Transparency and accountability are significant concerns when it comes to USFs in Africa. A study currently being reviewed by the GSMA highlights the issue of fund reallocation in the region, with difficulties in tracking where the money is being spent.

Clear reporting on how funds are allocated and utilized is necessary to ensure transparency and accountability.

In conclusion, USFs are essential for advancing network connectivity in Africa. However, challenges exist in terms of ownership and sustainability. To fully leverage the potential of community networks, it is essential to remove barriers to their access to USFs.

Regulatory experiments, collaboration with CSOs, and the utilization of existing resources are instrumental in supporting community networks. Transparency and accountability in fund allocation and reporting are vital for the effective use of USFs in Africa.

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The debate on internet infrastructure in Europe has been heavily influenced by the concepts of digital sovereignty and protectionism. Telco providers are demanding payment from content application providers for the traffic they carry. However, users argue that they are the ones generating the traffic, not the companies.

This has led to a negative sentiment surrounding the fair share proposal.

The fair share proposal is seen as a potential disruptor to the way interconnection agreements are made. There are concerns that it could narrow down the scope of Internet Exchange Points (IXPs), which could ultimately lead to increased costs for consumers.

This negative sentiment is shared by a coalition of global civil society organizations, who have released a statement expressing their opposition to these policies. They argue that such policies have adverse effects on users and the open Internet.

The implementation of similar policies is being considered by many jurisdictions, including Brazil, India, South Korea, Australia, and parts of the Caribbean.

This suggests that the debate on internet infrastructure is not limited to Europe, but is gaining global attention.

Konstantinos Komaitis, a strong critic of the fair share proposal, has been resisting it since its inception. He believes that the proposal is an awful idea and needs to be resisted.

Additionally, he emphasizes the importance of open and accountable discussions on infrastructure, as well as the need to create systems that allow maximum participation and have sufficient checks and balances against misuse.

The European Commission has handled public consultations remarkably by using an exploratory consultation process to identify issues before drafting legislation.

This demonstrates their commitment to transparency and ensuring public input. However, there are concerns about the unclear policy objective to tackle connectivity issues in Europe. It is also noted that the Commission appears to be prioritizing access networks over other networks, which is viewed as potentially problematic.

Collaboration and working together are seen as key to infrastructure building.

Various actors, including telecom providers, big technology companies, tower companies, and municipalities, should participate in the process. This is because increasing reliance on the internet requires a collective effort. Rather than pitting technology companies against telcos, it is believed that they should work together.

Universal Service Funds (USFs) may provide the framework for this collaboration.

Konstantinos Komaitis also emphasizes the importance of open and accountable discussions on infrastructure. He highlights the need to ensure that funds are not misused or mismanaged and proposes the implementation of accountability mechanisms to avoid such issues.

In conclusion, the debate on internet infrastructure in Europe is shaped by the ideas of digital sovereignty and protectionism.

The fair share proposal, which involves payment from content application providers, is viewed negatively due to concerns about the impact on interconnection agreements and potential increase in costs for consumers. Similar policies are being considered in other jurisdictions. Konstantinos Komaitis strongly opposes the fair share proposal and stresses the importance of open discussions and collaboration in infrastructure building.

The European Commission has demonstrated transparency through its public consultations, but concerns remain about the clarity of policy objectives and prioritization of access networks. It is believed that maximum participation and accountability mechanisms are key to ensuring effective infrastructure development.

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The analysis of the provided information reveals several key points regarding universal service funds (USF). Firstly, it is noted that a significant portion of USF funding is being directed towards larger operators, which is seen as a negative aspect. This raises concerns about the fair allocation of resources and the potential exacerbation of inequality within the telecommunications sector.

Argentina, Chile, Colombia, and Peru are cited as countries with high disbursement rates, indicating a potential bias towards larger operators in these regions. On the other hand, many countries either do not utilize USF at all or use it for other purposes, such as creative accounting, which further highlights the issue of improper allocation.

Furthermore, the analysis reveals that smaller internet service providers (ISPs) face obstacles in accessing USF funds.

These ISPs are required to obtain a letter of credit amounting to 25% of the funds needed, along with a 25% match requirement. This poses a significant financial burden on smaller ISPs and effectively shuts them out of the Broadband Expansion and Enhancement Program (BEED).

This observation underlines the need for a more equitable and inclusive approach to accessing USF funds, particularly for smaller players in the industry.

Advocacy for changes in the design and disbursement of USF is also highlighted. Organizations have partnered with other stakeholders to advocate for reforms that would facilitate a fair and transparent process for the allocation of funds.

This includes ensuring the inclusion of all types of stakeholders, not just large operators, and developing a more accessible and streamlined application process.

The analysis also reveals an increased awareness and recognition of community networks within public and regulatory bodies.

Over the past 2-3 years, there has been a growing awareness of the role that community networks can play in improving connectivity and bridging the digital divide. This has led to the creation of new working groups within national regulators, specifically advocating for community networks.

This development suggests a shifting paradigm where the importance of community-driven initiatives is being acknowledged and integrated into policymaking and regulatory frameworks.

Another significant point raised in the analysis is the need for stronger public involvement and multi-stakeholder partnerships to ensure transparency and prevent the misuse of USF funds.

Increased transparency is highlighted as a requirement to address concerns about the potential improper use of funds. Additionally, the analysis notes that not all stakeholders are adequately represented in the decision-making process. Therefore, a more inclusive approach that actively involves all relevant actors is necessary to foster a fair and accountable system for USF governance.

The analysis also brings attention to the growing possibility of including big tech companies in contributing to the USF.

Following a recent national regulator consultation, there are rumors suggesting that big techs may be asked to contribute to the fund. This potential development has garnered support from some stakeholders who argue that involving big tech companies could provide additional resources to support the goal of industry, innovation, and infrastructure in line with Sustainable Development Goal 9.

However, the analysis reveals instances where the USF funds have been misused.

For example, in Paraguay, surveillance cameras were purchased using USF money. This highlights the potential for inappropriate use of funds and underscores the need for proper oversight and accountability measures to ensure that USF funds are used for their intended purpose.

In conclusion, the analysis of the provided information underscores several significant issues pertaining to universal service funds.

The preferential allocation of funds to larger operators, the challenges faced by smaller ISPs in accessing funds, and the need for reforms in the design and disbursement processes are key concerns. The growing recognition of community networks, the importance of transparency and multi-stakeholder partnerships, and the potential inclusion of big tech companies in contributing to the fund are also notable observations.

However, instances of fund misuse and inappropriate usage serve as a reminder of the critical role of effective governance and oversight mechanisms. Overall, the analysis highlights the necessity for reform, inclusivity, and accountability in the management of universal service funds, ultimately ensuring equitable access to quality telecommunications services.

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In this introductory session, six speakers were introduced to discuss various aspects of technology, connectivity, and digital inclusion. Natalia Fodic, the Director of International Programs at Connect Humanity, is an esteemed expert in technology and communications policy. With over 15 years of experience, Fodic brings a wealth of knowledge to the discussion.

She is joining the panel online from Brazil.

Konstantinos Komaitis, currently a non-resident fellow and senior researcher at the Lisbon Council, is present in the room. With a background in policy development and strategy, Komaitis spent 10 years as Senior Director at the Internet Society.

He is also a published author and public speaker, making him a valuable contributor to the session.

Ben Matranga, the Managing Partner of Connectivity Capital, focuses on impact investment in developing countries to expand internet access. With almost two decades of experience in leading private equity, venture capital, and debt investments in emerging markets, Matranga offers valuable insights into the challenges and opportunities in connecting underserved regions.

Teddy Woodhouse, the International Policy Manager at Ofcom, the UK Communications Regulator, is an ICT for development expert.

He has extensive experience in both the public and non-profit sectors, including his previous role with the Alliance for Affordable Internet. Woodhouse is responsible for Ofcom’s engagement within the International Telecommunication Union (ITU) and provides a strong voice for the UK in the global discussions on connectivity.

Josephine Meliza, a Digital Inclusion and Transformation Consultant, is a pioneer of the community networks movement in Africa.

Currently serving as the Regional Policy Coordinator for Africa within the APC’s LockNet project, Meliza brings a unique perspective on digital inclusion initiatives on the continent. Additionally, she co-chairs the Africa Community Network Summit and serves as a member of the MAG, the IGF Multi-Stakeholder Advisory Group.

Finally, Saul Luca de Tena, a Connectivity Solutions Specialist at Giga, a UNICEF-ITU joint initiative, aims to connect every school in the world to the internet by 2030.

With 15 years of experience in strategic program management within technology and development, capacity building, and policy advocacy, de Tena’s expertise is essential in ensuring widespread access to education through connectivity.

With representatives from various stakeholder groups, including civil society, the private sector, government, and UN agencies, this diverse panel promises engaging discussions on how to improve connectivity globally.

The wide range of expertise and experiences will contribute to a comprehensive understanding of the challenges and opportunities in driving digital inclusion.

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The UK has implemented a universal service obligation for broadband connectivity, which came into effect in 2019. This obligation requires BT and KCOM to provide universal broadband service in specific geographic areas assigned to them, ensuring all citizens have access to a decent broadband connection.

Users without a decent broadband connection can request service from BT or KCOM, with the cost being no more than what an average commercial consumer would pay.

Additionally, the build cost of connecting these users, up to £3,400, will be covered.

In rural areas, a shared rural network agreement between the UK government and major mobile network operators promotes competition and provides reliable mobile services to these areas.

Ofcom, the regulator, plays a crucial role in achieving universal service.

It ensures transparency, enforces targets, and adapts the process to address challenges.

To address affordability, Ofcom negotiates with broadband providers to create affordable packages for low-income households, with specific expectations for minimum speeds and performance.

Collaboration between the regulator and industry is essential for protecting consumer interests.

Both BT and KCOM are committed to meeting universal service obligations.

Ofcom creates a regulatory framework catering to both large and small operations. The strategic separation of BT from OpenReach fosters competition and diversification. While Ofcom doesn’t fund community networks directly, it creates market conditions for their existence.

Ofcom enables a diverse and competitive market for internet service providers, resulting in a good and affordable broadband experience for consumers.

Fair competition is promoted by ensuring a level playing field for communication providers.

Research, facts, and evidence are necessary for well-informed decision-making by regulators, enhancing transparency and understanding.

Regulators, communication providers, and stakeholders should collaborate to improve global connectivity, reducing the digital divide for equal access to information and opportunities.

The UK demonstrates a comprehensive framework for universal broadband connectivity.

Ofcom’s role in transparency, competition, and consumer protection is significant. Collaboration with the industry and the availability of social tariffs for low-income households highlight the commitment to universal service.