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Workshop on Universal Service Obligations (USO) - Concluding remarks 


Concluding remarks from the USO workshop 18th-19th March 2003 

1. What not to do
Don’t write a blank check, in the sense of enforcing operators to deliver networks and/or services without the regulator having control of the expenditure to be compensated. 

Do not impose anything that isn’t fully financially supported. 

Avoid regulating retail prices so that services must be provided below cost.

Avoid having to carry out a net cost calculation exercise, if possible, because it is a very costly and complex procedure.

2. What to do

Accept the contribution to universal service provided by mobile operators in areas where they have coverage.

Focus universal service attention on areas that are not yet covered by either mobile or fixed networks. In these areas, follow primarily a community approach, providing services in a community, rather than an approach based on individual subscribers. 

Focus on initiatives that will also encourage economical growth.

The Directive includes an obligation to provide public payphones. Investigate the possibility to expand public payphone into financially viable tele centre that also offers additional services and create job opportunities. RITI could assist in conducting a study on how such a centre could be organised, financed and run.

The Directive gives a possibility to finance public payphones through the universal service fund, if there is a net cost. That could include a payphone within a tele centre.

If a fund is created and financed through contributions from operators, make sure that the contributions requested are reasonable and non-discriminatory and do not undermine the continued development the telecom industry. To transfer financial resources from commercially viable investments to a fund is counter productive.
Make available the contributions from the fund through a carefully designed auction procedure rather than on the basis of net cost calculation.

Encourage the introduction of differentiated tariff schemes, both by fixed and mobile operators, based on commercial considerations. Mobile operators have already introduced differentiated tariff schemes to a significant extent. Focus on what has already been done on a voluntary, commercially viable way and encourage a further development of such schemes. 

3. How to proceed

RITI dot-Gov has offered assistance, together with the speakers, to comment on a draft policy.

Allow and encourage rebalancing of tariffs in a “soft” way. Remember that it is not in the interest of the operator to disconnect an existing fixed line subscriber since the main cost from the connection is a “sunk cost”.

Identify the need for: 
· Public payphones
· Directory services
· Disabled users

Directory services are mostly profitable and should not result in any “net cost”, but make sure that the regulation is in place concerning requesting operators to provide the necessary information to those setting up directory services.

Look into the needs of disable persons, but don’t forget the necessity of being realistic in what can be provided. 

Investigate what can be achieved by designating universal service providers. But when designating them, avoid creating high administrative costs.

Look into Tele centres: 
- Financial aspects

- Legal aspects

RITI has offered assistance to investigate and to discuss with the World Bank and EBRD potential ways of assisting with investment capital.

Discuss with operators and encourage them to act, rather than imposing regulatory obligations.

RITI Dot-gov is part of the dot-Com alliance financed by USAID 

Dot-Com Alliance


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