Universal Service Obligation Fund


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UNIVERSAL SERVICE OBLIGATION FUND
(USOF)
Department of Telecom, Ministry of Communication
Pankaj Kumar Jt. Administrator USOF, Govt. of India

ICT STAT AT A GLANCE: AUGUST 2019
• Wireless subscribers: 1171 Million • Wireline subscribers: 21 Million • Total : 1192 m( urban-681m +Rural-511m)
• Tele-density : overall 90 % (Urban-161 ; rural :57)
• Broadband subscribers: 615 m(597 on mobile)
• Cable/DTH: 170 m TV homes( DTH-70m ; Cable- 100m)
• Public Wi-Fi: about 5 lakh Access Points

DEFINATION OF UNIVERSAL SERVICE OBLIGATION INDIAN TELEGRAPH ACT
UNIVERSAL SERVICE OBLIGATION: MEANS THE OBLIGATION TO PROVIDE ACCESS TO *TELEGRAPH SERVICES TO PEOPLE IN THE RURAL
AND REMOTE AREAS AT AFFORDABLE AND REASONABLE PRICE
Till 2006, ‘Basic’ was prefixed to ‘telegraph Services’

Policy Options for Universal Service
• Market based reforms • Mandatory service obligations • Cross subsidies • Access deficit charges • Private Public Partnerships (PPPs) • Pay or play • Universal funds

USOF: Policy Objectives
• Provide widespread and non-discriminatory access to quality ICT services at affordable prices to people in rural, remote, and unserved, areas.
• Provide an effective and powerful linkage to the hinterland thereby mainstreaming the population of rural and remote parts of the country.
• Ensure that universal services are provided in an economically efficient manner. • Ensure that by developing hitherto unconnected areas, the benefits of inclusive
growth are reaped by our nation, bringing in its wake rapid socio-economic development and improved standards of living.

USOF : Policy Underpinnings
• Availability: the level of service is the same for all users in their place of work or residence, at all times and without geographical discrimination
• Affordability: for all users, the price of the service should not be a factor that limits service access
• Accessibility: all telephone subscribers should be treated in a nondiscriminatory manner with respect to the price, service and quality of the service, in all places, without distinction of race, sex, religion,caste etc.

UNIVERSAL SERVICE OBLIGATION FUND : INDIA
➢ Universal Service Obligation Fund (USOF) was set up by an Act of Parliament in December 2003 by amending the Indian Telegraph Act, 1885.
➢ Objective of USO Fund is to provide access to telecom services in a nondiscriminatory manner to people in the rural and remote areas at affordable and reasonable prices, thereby bridging the rural-urban digital divide.
➢ USOF inflow comes from the collection of Universal Access Levy (UAL) through the license fee charged on licensee of DoT @ 5% of the adjusted gross revenue (AGR)
➢ For commercially non-viable rural and remote areas, USOF provides subsidy support in the form of Net Cost or Viability Gap Funding (VGF) to incentivize telecom service providers.

BACKGROUND AND QUICK FACTS
• Universal Service Support Policy (USSP) came into effect w.e.f. 1.4.2002.
• Administrator, USOF was appointed on 01.06.2002
• Indian Telegraph Act 1885 was amended in 2003 to give statutory status to USOF
• Part IIA, Section 9A to 9D of the Act pertain to USOF • The Rules for administration of the Fund known as Indian Telegraph (Amendment) Rules, 2004 were
notified on 26.03.2004
• Rule 523: Defines Administrator and the Fund • Rule 524: Powers of Administrator • Rule 525: Scope of support from USOF • Rule 526: The selection of the Universal Service Provider shall be made by a bidding process from amongst
the eligible operators • Rule 527: Release of Funds to Universal Service Providers

POLICY PRESCRIPTION ON USOF
•NTP 1994 : One of the objective was provision of access to all people covering all villages as early as possible, for certain basic telecom services at affordable and reasonable prices.
•NTP 1999: envisaged development of telecom facilities in remote, hilly & tribal areas and provision of universal services to all uncovered villages.
•NTP 2012: ‘Right to broadband’ enshrined and envisaged provisioning of converged communication services in commercially unviable rural & remote areas using USO Fund
•NDCP 2018: ➢ Provide Universal broadband connectivity at 50Mbps to every citizen ➢ BharatNet – Providing 1 Gbps to Gram Panchayats upgradeable to 10 Gbps ➢ GramNet – Connecting all key rural development institutions with 10 Mbps upgradeable to 100 Mbps ➢ JanWiFi – Establishing 2 Million Wi-Fi Hotspots in rural areas ➢ Ensuring connectivity for all uncovered areas in the North Eastern States, Himalayan region, LWE areas, Aspirational Districts, Islands and Border Areas ➢ Marginalized communities, women and persons with disabilities ➢ Promoting innovative, effective and scalable alternate technologies for remote areas ➢ Enabling access provision by any entity capable of fulfilling the Universal Service Obligation ➢ Redesigning the USOF and broadening its objectives to enable universal broadband access including for economically and socially weaker sections in urban pockets ➢ Strengthening institutional capacity of USOF to ensure effective rollout of services in uncovered, remote and rural areas

USOF IN DOT: ORGANISATIONAL STRUCTURE

BBNL

Administrator, USOF

DDG (Special Projects)
Director

Joint Administrator (Tech.& Admin)
Dy. Admin(Tech.)

*Joint Administrator (F) Dy Admin(F)

*currently Addl. Admin(F)

DDG (I) Director

DDG (II) Director

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Universal Service Obligation Fund