These days, Universal Access and/or Service Funds are increasingly being used in ways outside of their initial purpose, which it could be argued is widening the digital divide.
In the early days of telecoms regulation, the sometimes prohibitive cost of building out networks, particularly to small communities where the deployment costs were unlikely to ever be recovered, was widely acknowledged as a deficiency that would need to be addressed in order to ensure that all citizens had access to telecoms services. It is with this in mind that concepts, such as Universal Access and Universal Service emerged, as a means of supporting the continued expansion of telecoms networks when it might be uneconomical to do so. As a result, a global best practice is the establishment of a Universal Access and/or Service Fund (UASF), which has been implemented in many Caribbean countries.
However, although the initial and still-existing premise for UASFs in many Caribbean countries was infrastructure-related – to connect the unconnected – there has been a growing departure from that construct. As a result, it could be argued that the way UASFs are now being used may have far-reaching consequences for the state of telecoms and the internet into the future.
‘Infrastructure-adjacent’ activities
Thanks to the emphasis on mobile/cellular communications across the region, for which comprehensive networks already exist and take-up is high, a case could be made that Caribbean countries already have (almost) countrywide network coverage. Universal Access and Universal Service have thus been achieved, obviating the need for further infrastructure expansion. However, and noting that UASFs were still being collected, in some quarters, policymakers started to make a case for ‘infrastructure-adjacent’, or ‘other value-added’ activities, which may not necessarily be strictly defined, to be financed with UASFs.
Some of the infrastructure-adjacent activities that were implemented included addressing key barriers to access on the consumer side, such as access to suitable devices. To that end, UASFs in the many Caribbean countries have been used to support tablet computers in schools programmes, which gained considerable prominence last year, due to the COVID-19 pandemic, and the shift to remote and digital learning.
Holes in networks
Although mobile/cellular coverage is nearly ubiquitous in most Caribbean countries, the pandemic revealed some gaps in the robustness of the wired and wireless networks. Three key gaps were, when:
- more people needed to go online simultaneously for longer periods of time
- more traffic was originating in residential areas, due to the work-from-home measures that had been instituted, and
- mobile/cellular services, especially mobile data, was not adequate for remote working or remote learning.
In some countries, traffic on Internet networks increased by 60%, as more people had no choice but to use the Internet to conduct business online, for entertainment, and everything in between, which resulted in gaps (i) and (ii). However, gap (iii) highlighted the limited nature of the mobile/cellular infrastructure, which though nearly universal and perhaps preferred for personal use, was not suitable for work, and when high-bandwidth connectivity was required for eight-plus hours a day.
Although the regional telcos, in particular, have offering WiMax-based services that leverage their existing mobile/cellular infrastructure, generally, coverage was spotty, and the connectivity inconsistent. With the pandemic and the upsurge in traffic, the quality of that service would also have been affected.
As can be expected, consumer complaints ensued, and telcos had to urgently respond, although their business was also being adversely affected by, for example, the collapse of the hotel industry in the region. Nevertheless, mobile/cellular networks were upgraded to LTE (Long Term Evolution) technology and were expanded with the installation of more cell sites. However, and with regard to the latter, and in the majority of instances, UASFs were not used for those network expansion activities.
The politics of UASFs
Typically, the UASFs in Caribbean countries are funded in two ways, either as a tax levied directly on consumers based on their consumption of certain services, such as in Jamaica, or as a fee payable by the telcos, calculated as a percentage of revenue, which is the approach used in many Eastern Caribbean countries. It therefore means that UASFs tend to have a revenue stream, although in many countries, the amount being paid in has been declining, as consumers have switched over to the internet for a broad range of activities. Having said this, the process to access the UASFs can be protracted, and with perception that infrastructure-related projects were no longer a priority, it would appear that UASFs were growing without a purpose.
It is in light of the above that to varying degrees, politics has become evident. Policymakers want to be seen as ‘making a difference’ in their communities, and UASF administrators did not seem to be able to identify projects, based on the initial construct for those funding mechanisms. The emphasis thus shifted to other ‘value-added’ activities, such as computing device purchase or subsidies, procuring and installing infrastructure in community centres and schools, and even paying the bills for school and community centre internet connectivity, which are now being channelled to UASFs.
As it currently stands, many of our countries are highly indebted, and so outside of servicing loans, paying salaries and other key recurrent expenses, Governments may not readily have the means to directly finance the above-mentioned ‘value-added’ activities. Hence, it could be argued that UASFs are being seen as an extension of the Consolidated Fund, or as a means for Government being able to implement telecoms-associated activities that it would otherwise struggle to implement.
The widening digital divide
It must be emphasised that although implementation of ‘value-added activities’ might be necessary – as they are gaps or deficiencies that need to be addressed – the question of whether UASFs should be used to finance them still persists. The three activities mentioned, device purchase/subsidy, community centre and school outfitting, school/community centre bill payment, tend to be focussed on people or situations that cannot afford them. However, frequently, little or no consideration is being given to the following issues, which ultimately, exacerbate the digital divide:
- matters related to the sustainability of those activities
- the maintenance-related issues that are inevitable when equipment is procured, and should be factored in
- the extent to which low-income households can afford to purchase computing devices, even when a subsidy is available
- the extent to which low-income households can afford internet access in particular, even if they are given computing devices
- whether suitable internet connectivity is available in communities that allow for extended periods of use – at reasonable prices.
Once again, COVID-19 highlighted some of the challenges that were being experienced across the region:
- Parents in low-income households still could not afford consistent internet service for their school-age children;
- Government subsidies towards the purchase of tablet computers still had not been redeemed;
- The quality and consistency of internet service in many communities was poor, and could not be reliably used for conducting business;
- Some communities only had mobile/cellular coverage; wired broadband internet was not readily available, resulting in consumers having to use mobile/cellular broadband data, which is more expensive.
5G and the future
Into the future, most Caribbean countries are eager for 5G technology to be rolled out, but most of the telcos have indicated that there is no immediate or imminent intention to do so. Further, the regional telcos in particular have been advocating for more public-private investment in the infrastructure, and for Over The Top service providers to be charged for access to their networks. Although it is uncertain whether these issues will be resolved in the telcos’ favour, how UASFs are and should be used in the future may need to be revisited.
As much as UASFs in Caribbean countries have an income stream, the amounts received are finite. Further, big infrastructure-related projects are expensive – and may even require multiyear accumulation of funds in order to pay for them. On the flipside, there are consumer-related needs that Governments need to address, in order for citizens to be able to meaningfully participate in the digital societies and economies that are emerging. The use of UASFs ought not be frivolous, capricious or primarily with politics in mind. Instead, they should be employed to have a longer-term and meaningful impact in reducing the digital divide, as we continue to advance to digital societies.
Image credit: OpenClipart-Vectors (Pixabay)
