Figure 1: Example of VSAT based Bypass configuration
2.5 The bypass operator goes through the normal approach in applying for high capacity access to the local PSTN (typically T1 lines). Their stated line of business (typically market research) usually calls for such access and many telephone handsets. Consequently the PSTN network provider installs the T1 lines and a ‘key system’ (or small capacity PBX) that is used to provide the switching connectivity for the many phones installed. This is depicted in ROOM 1 in figure 1. The equipment in room 1 would appear normal to the untrained eye. However, in a separate room (room 2), which is normally not accessible by the network provider’s technicians Kelcom Inspector, the bypass operator sets up the heart of the bypass operation (i.e., the interface between the Internet and the local PSTN). A vigilant inspector would recognize that the bypass operator would have disconnected the T1 lines from the key system and connect them to the VoIP gateway. The equipment depicted in room 2 shows a typical supplier’s equipment; however, there are many suppliers on the market for such equipment. A brief description of the functionality of the equipment follows:
• The satellite modem establishes connectivity via a VSAT which provides a high speed connection to the Internet via a similar VSAT located in another country.
• Cisco 3640 ® router establishes point-to-point logical connectivity to the Internet.
• The Cisco 2509 ® router combines with the Multitech ® modem to provide remote dial-up access in order to facilitate remote network management and control. This means little or no local technical manpower is required and therefore most of these sites are typically un-manned.
• The Cisco ® AS5300 is the VoIP gateway which provides the interfacing functionality between the Internet world and the PSTN. Such gateways can have the capacity to manage 4 T1’s (equivalent to 96 64-kbps voice channels).
• The Cisco 2900 provides local area network connectivity for the above mentioned devices.
3.0 BYPASS VIA INTERNATIONAL PRIVATE LEASED CIRCUITS (IPLC’S)
3.1 In this scenario the bypass operator gains access to the Internet via an IPLC. The IPLC replaces the VSAT and removes the physical visibility of any international communications link.
4.0 BYPASS VIA PRIVATE DATA NETWORKS
4.1 This scenario is similar to the IPLC scenario. The difference lies in the fact that instead of a point-to-point connection, as in the case of the IPLC, connection is possible over multiple points on an international data network (e.g., Wide Area networks).
5.0 GSM GATEWAY BYPASS
5.1 This is new and growing fast. GSM gateway fraud occurs when call resellers use GSM gateway devices for fixed-to-mobile calls and mobile-to-mobile calls. A GSM gateway is a device that contains a set of SIM cards, and by interfacing with landline equipment such as a PBX or the Internet provides access to a GSM network. The result is that traffic delivered to GSM operators by unlicenced carriers is billed as internal rather than interconnect traffic.
Figure 2.a. shows a national scenario and figure 2.b. shows an international configuration. Figure 2.b. is more applicable to the Barbados context.
Figure 2.a: National Scenario
Figure 2.b: International Scenario
5.2 There are four entities that should be concerned by bypass fraud. These are:
(1) The International carriers:
• these stand to lose revenue earning opportunities.
(2) The local fixed network providers:
• will lose revenue through them not being able to collect terminating fees;
• will experience inefficient use of network capacity due to excess and illegal traffic occupying plant and equipment;
• may have to invest in additional network capacity to maintain optimum network efficiency and Grade of Service.
(3) The local cellular network provider who:
• will suffer consequences similar to those encountered by the local fixed network provider.
(4) The Barbados Government who:
• will suffer revenue losses through reduced VAT and corporation tax collections;
• from the perspective of law enforcement and national security, will find it difficult to counter the illegal activities of drug pushers, money launderers and terrorists who all use such networks to maintain their anonymity;
• will find it difficult to encourage investment in telecommunications networks, particularly by foreign investors.
6.0 VOICE OVER INTERNET PROTOCOL (VoIP)
6.1 The Voice over Internet Protocol (VoIP) policy being developed states that:
• The use of Net2phone, Vonage, Voice Sticks and IBN Flyfone service and any other such VoIP devices will be allowed, provided these VoIP providers enter into a partnership with a holder of a Barbados International Licence and such services are provided under the name of the Barbados Licence holder.
• All VoIP adapters (IP to telephone line) or IP phones will be prohibited unless the importer produces to the Customs Department a valid Barbados international/domestic carrier and service provider licence and (proof) certified by the Telecommunications Unit that the importer has such licences.
7.0 ¼STRONG>CONTROL OF BYPASS ¼/STRONG>
7.1 The Telecommunications Unit is limited to the identification and inspection of VSAT’s which can sometimes be difficult to spot because some owners go to great lengths to conceal the dish antennae. There is a database of all known VSAT’s on the island, this currently stands at 15 VSATs..
7.2 The fixed mobile and international network providers can do one or more of the following:
• disconnect the offending operators in accordance with Section 74 of the Telecommunications Act – Cap 282B;
• inform and liaise with the Telecommunications Unit in taking whatever action is deemed to be necessary and legal;
• build a database which profiles those fraudulent cases that have been discovered;
• share the above-mentioned database with The Telecommunications Unit;
• pursue civil law suits against the perpetrators of such activities.
7.3 The Telecommunications Unit will rigorously investigate such cases and enforce the relevant laws of the Barbados.
7.4 Satellite telephones will be strictly controlled as these can contribute to the bypassing of international networks. The use of these phones is limited to disaster relief and mitigation only and all such users of these phones must be registered with the Telecommunications Unit. A policy on the use of Satellite Telephones has been published.
8.0 ¼/FONT>EXEMPTION TO THE BYPASS DEFINITION
8.1 We propose to exempt the following:
• VoIP (the service) includes but is not limited to, peer-to-peer (p2p) type voice service. This involves calls made between two computers connected via the Internet, using IP-enabled voice communications services that do not connect to the PSTN and do not generally use (North American Numbering Plan) NANP-conforming telephone numbers, (p2p) services are not considered as telecommunication services as no numbers are used.
• VoIP (the service) includes but is not limited to, Pc-to-Phone, and Phone-to-PC and are considered as (VoBB), VoIP over Broadband. The dilemma facing regulations is how to regulate VoBB such as Skype, Yahoo, Google and the others as they do not have a physical presence in the network. However, consumers using such services usually must have a PSTN telephone or else face the risk of non connection to the emergency services, or suffer the consequences of power outages.
9.0 CONCLUSION
9.1 The Telecommunications Unit will on discovering that a person or persons is engaging in bypass request that a Prohibition Order is issued by the Minister in accordance with Section 67 of Cap 282B. After this the procedures as laid down in Sections 68 to 74 of Cap 282B will apply.
Issued by Telecommunications Unit
August 25, 2006
Universal Service in Barbados
1. This is a draft consultative document requesting comments from all interested parties in Barbados. This document has been prepared by the Telecommunications Unit.
2. Most countries in the World including India, China, Canada, the United States of America, the European Union and South Africa, has policies intended to allow universal access to telecommunications services.
3. The Telecommunications Act – Cap 282B at Sections 32 and 33 defines the current Universal Service Policy and the current Universal Service obligation at Section 33(1) (a) of Cap 282B it states:
• Ensure that basic telecommunication service, which is the ability to access dial tone in order to make telephone calls to other end-users, is reasonable accessible to all people in Barbados on an equitable basis wherever they reside or carry on business.
4. With the advent of a vibrant mobile telephony service, at least 99% of the population has access to telephone service and so section 33(1) (a) is no longer relevant.
5. Universal Service exists in Jamaica and throughout Central and South America.
6. In a recently published paper by the International Telecommunication Union (ITU) (April 15, 2006) entitled “What Rules for Universal Service In An IP – Enabled NGN Environment.” The following (6.1 to 6.13) are selected extracts from the ITU document:
USOs in Developing Countries
Some developing countries are continuing to depend on cross-subsidies, while others are turning to the use of universal service funds. For example, USOs in China involves assigning various telecommunications operators to pursue universal service targets in assigned regions and in India, a Universal Service Obligations Fund is used USO funds are also used in a number of other countries such as Chile and Peru. And network deployment obligations are used as a licensing condition (Brazil).
Universal Access Policy in China
In July 2002, the Ministry for Information Industry (MII) unveiled a blueprint for the so-called “village to village project” under which unconnected rural areas across the country were grouped into regions and assigned to one of the major telecommunications operators (China Telecom, China Netcom, China Mobile, China Unicom, China Railcom and China Satcom) in accordance with the company’s size and financial capacity.
China Mobile was made responsible for providing universal access to over 6, 112 villages in Sichuan Province. China Telecom’s responsibility included 3 457 villages in Inner Mongolia, and China Unicom given responsibility for providing universal access in 1,680 villages in Guangxi. China Railcom and China Satcom, two of the smallest operators, were assigned 193 villages in Henan and 132 in Sichuan, respectively.
The main objective of China’s universal access policy is the provision of a voice telephone service to all villages.
. The short-term goal is that by the end of 2005, at least 95% of villages would be provided with telephone services.
. The medium-term goal is that by 2010, all villages, hospitals and other organizations
. The long-term goal is that by 2020, all organizations and families can be connected to the public telecommunications network.
But there have been complaints that the plan is burdensome and unfair. For instance, China Railcom complained that the company’s cost for building networks in Henan province was much higher than its competitors. This is because many of the province’s countries, unlike those of other provinces, were not pre-laid with fibre-optic cables. While other operators need put in only 5 kilometres of cable from the nearest county seat to the village, China Railcom claimed it may need to install 50 to 100 kilometres. There have also been complaints that the assignment of specific operators to provide universal access to specific provinces impedes flexible solutions to the universal access challenge and does not facilitate use of the most appropriate technology for villages/provinces. For instance, a wireless operator may be able to supply service in mountainous regions more cost-effectively than a fixed line operator.
Support has been increasing for the establishment of a universal access fund that is considered to have the flexibility to compensate operators for the differing costs involved in providing universal access to replace the “village to village project.” Reportedly, the Ministry of Finance would be responsible for managing the fund, while the MII would draft the plans for the various universal access projects.
Source: Information gathered by this author during visits to China in November 2004 and August 2005.
Universal Service in India
The approach to universal access in India provides another interesting example of the way that a country with a very large population and number of rural villages is endeavouring to address its universal access concerns.
Universal Access in India
The USO Fund Administration is proceeding with plans to cover all 570,000 villages with public phones. It has already signed agreements for disbursal of subsidy from the Fund to support the more than 520,000 Village Public Telephones (VPTs) already installed. The bids for the remaining 57,000 villages have been invited. Agreements have also been signed for replacement of more than 180,000 VPTs on Multi Access Radio Relay (MARR) technology.
In addition, the Department of Telecommunications will invite bids to set up Tele-Information Centres to provide access for both voice and data in villages with a population of more than 2,000. So far, over US$100 million has been disbursed as subsidy to the Universal Service Providers.
Support through the USO fund is also being provided to subsidise the capital and operating cost of Direct Exchange Lines (DELs) installed in rural areas after the beginning of 2002. About 3.1 million rural DELs has been installed as of the end of March 2004. Bids have also been invited for providing telecommunications facilities to new rural subscribers.
Source: Telecommunications Regulation Authority of India (TRAI)
6.2 Developing countries
In developing countries, universal access funds have placed emphasis on ensuring basic public access (i.e. voice-grade fixed access to the public telecommunications network). But with the growing importance of the Internet some funds are also supporting public access to value-added services, including Internet access. In Chile, the government has redefined the Universal Access Fund, which has been successful in extending basic telecommunications to rural and low-income areas, to support telecentre projects. In India, too, telecentres are eligible for subsidies from the universal service fund.
6.3 Financing a Universal Service Fund
In principle, a Universal Service Fund could be financed through several means, in particular:
• direct levy on all consumers of communications services (for example, a fixed amount that appears directly on the bill);
• a direct or indirect levy on consumers (via a levy on communications providers that is passed on to customers i.e., the USA/French model);
• funding from the proceeds of privatization and spectrum licence fees; and
• government funding via general taxation revenue.
Contributions from operators
A levy on operators has been the most commonly used approach with the levy ranging from 1% (Argentina, Brazil), to 5% (India), 6% (Malaysia) to over 10% (US). The table below indicates some examples of required contributions from operators across in a range of countries.
Some Examples of Universal Service Funds
Country Source of Revenue Administering agency Method of allocating funds
Argentina 1% if all operators’ gross revenues Operators (virtual fund) Government to determine based on its goal to increase fixed teledensity and mobile teledensiy.
Australia Levy on licensed operators depending on market share of eligibility revenue Australian Communications and Media Authority (ACMA) The government determines the level of subsidy paid to the USO provider. A USO model was previously used but subsidy amounts are now administratively determined, broadly based on previous modeled amounts.
Brazil 1% of service providers gross operational revenues earned from the provision of telecom services Anatel, the regulatory agency Universal Service Fund (FUST) will support ICT projects consistent with the government’s development objectives
Canada All market participants, both fixed and mobile pay fixed % of eligible telecom revenue (1.1% in 2003 & 2004) CRTC, regulatory agency Universal Service Fund to compensate costs estimated on basis of Long Run Marginal Costs plus 15% for joint and common costs.
Chile Government’s budget Subtel, the regulatory agency Subsidies distributed through competitive bidding (lowest bid wins)
Country Source of Revenue Administering agency Method of allocating funds
Colombia 5% of national and long distance operators’ revenues plus funds from license fees Ministry of Communications Subsidies distributed through competitive bidding (lowest bid wins)
France Operators contribute a % of revenue Caisse des Depots et Consignations Compensation for costs incurred by USO provider (France Telecom)
Italy Contribution of 1% of revenue by 4 major operators Ministry of Communications USO provider (Telecom Italia) makes offer to provide services at specified cost and regulator decides what part(s) of offer to accept
Japan Operators contribute to Universal Service fund Ministry Fund compensates US provider
Malaysia Fixed and mobile network operators contribute 6% of their weighted revenue from designated services to the Fund Malaysian Communication and Multimedia Commission (CMC), regulatory agency During an interim period (1999 to 2002), Telekom Malaysia was the only operator with access to funds. Starting in 2002, other operators were invited to submit proposals for USP and be compensated from the fund through a competitive process
Nepal 2% level on the revenue of the incumbent operator, ISPs and mobile operators. NTA (Nepal Telecom Authority) Subsidies distributed through competitive bidding
India 5% levy on the revenue of telecommunication operators TRAI (the telecom regulator) Subsidies distributed through competitive bidding (with lowest bid winning)
Peru 1% of all operators’ and CATVs’ gross revenues OSIPTEL, regulatory agency Subsidy goes to lowest bidder
South Africa 0.16% of all operators’ revenues Universal Service Agency, specially created unit to manage fund Subsidies mainly awarded to telecentre projects and areas of greatest need
Switzerland ISUO Licence publicly tendered to lowest bidder. Swisscom AG won bid (did not seek any subsidy)
Country Source of Revenue Administering agency Method of allocating funds
Uganda 1% levy on all sector participants including telecom operators, the postal service, couriers, ISPs Uganda Communication Commission, the regulatory agency Subsidies distributed through competitive bidding (lowest bid wins)
United States 11.1% in second quarter of 2005 on operators interstate end-user revenue (which is passed on to customers as a Universal Service Fund fee levied on monthly phone bills) Universal Service Administrative Company (a private not-for-profit-corporation) A number of programs, including: high cost support mechanism; low-income support mechanism; rural health care support mechanism; schools and libraries support mechanism (E-rate)
6.4 ¼STRONG>The ITU’s definition of Next Generation Networks
Next Generation Network (NGN): a packet-based network able to provide telecommunication services and able to make use of multiple broadband. QoS-enabled transport technologies and in which service-related functions are independent from underlying transport-related technologies. It enables unfettered access for users to networks and to competing service providers and/or services of their choice. It supports generalized mobility that will allow consistent and ubiquitous provision of services to users.
Source: ITU-T Recommendation Y.2001 (2005)
6.5 Migration from PSTN TO NGN
The expected migration from PSTN to NGN could itself raise universal service concerns. For instance, the transition from PSTN to NGN is unlikely to take place evenly across customer groups and geographical areas. The more profitable customers are likely to be the earlier movers to NGN networks. As traffic migrates to IP networks there will be fewer customers generating PSTN revenue from voice service. Customers remaining on the old network are likely to be clustered in poorer locations and demographic groups. Moreover, the migration from PSTN networks could increase average per line costs of existing networks and lead to a deterioration in quality of service. At some stage in the future, the PSTN could become uneconomic to maintain and their closure would become a possibility (unless obliged to remain in operation due to USO). Indeed, closure of PSTN legacy networks would be a distinct prospect since the cost reduction benefits from migration to an NGN network can only be appropriated by an operator that is not burdened by the costs of also having to continue to maintain the PSTN network. As a result, the transition to NGN could raise significant universal service issues. There may be pro-competition reasons why the regulator may force the incumbent to continue operating the PSTN (at least for some time). But even where the PSTN is not permitted to be “switched-off” there could be concerns that the migration to NGN may create a ‘digital divide’ in regard to the quality and range of services between those with NGN access and those still using the PSTN.
6.6 Technological-neutrality for cost-effective delivery of universal access in Rural areas
Wireless communication technologies, such as fixed wireless access and very small aperture terminals (VSATs), can be effective means of establishing telecommunication networks in rural areas due to their advantages over wired telecommunications in terms of cost and ease of installation. For example, when installing telephones in sparsely populated rural areas, wireless communication technologies can be used in conjunction with satellite stations to achieve coverage of isolated settlements over long distances.
In suggesting that mobile technology be permitted to play a role in delivering USOs, the suggestion is not that mobile technologies should be subject to an additional USO, but that a USO couched in terms of basic voice and data services might be delivered through either fixed or wireless technologies or, indeed, a combination of these and other technologies. In short, the choice of technology should not be specified. A specification that fixed line be used may have been justified at the time it was introduced e.g., because it allowed provision of data services, including broadband. But other technologies, including wireless mobile technologies, are now also promising broadband capacity.
With spectrum becoming an increasingly important resource, there is need to review spectrum allocation ad management policy with a view to allowing more flexible use of spectrum, including spectrum trading and liberalization. This will enable: a bigger role for the market in deciding how much spectrum should be allocated to different uses; faster flexible access to spectrum, including unused and underused spectrum; the development of new, spectrum efficient technologies; and innovation in the use of the spectrum and spectrum-based products and services.
Satellite systems have also been developing technologically enhancing ability to serve rural areas. Prices for VSATs have fallen rapidly allowing manufacturers to expand sales of VSAT systems into low-end applications such as rural telephony.
Power-line. Use of the power grid as a communications network – known as broadband over power lines” (BPL) in the US, and “power-line communications” (PLC) in Europe – appears to be receiving official acceptance with the FCC approving the use of power-line technology in the US in October 2004. Advocates of the technology argue that it promises several advantages offering not only voice but broadband with connection speed not dependent on distance from the telephone exchange (as with DSL), or on the number of customers (as with cable). Also, unlike its rivals, power-line offers uploads at the same speed as downloads and promises to offer far more capacity than today’s cable networks.
Moreover, the technology will reportedly allow utilities to: monitor what is happening on their power grids in real time, down to local substations; read power and water meters without entering customers’ premises; and manage peak loads by, for example, turning down a residential air conditioner remotely while a customer is at the office, in return for a lower tariff.
Advocates claim that a single airship could potentially provide coverage over an area of about 800,000 square kilometers. It should thus be possible to create “hotzones” of coverage encapsulating entire cities and their surrounding countryside, rather than the smaller “hotspots” of Wi-Fi coverage found in airports and coffee shops. Moreover, Stratellites are expected to cost much less than satellites (about US$20 million each) and can be reused. After hovering for 18 months they can be recovered for servicing and then re-launched.
6.7 Pro-competition regulation
Pro-competition regulation is also important to make rural and remote markets more attractive to prospective new entrants. But there should also be vigilance to eliminate regulations (including local government regulations) that serve as a barrier to new entry. Countries that have committed to apply the pro-competitive regulatory guidelines espoused in the WTO Reference Paper attached to the February 1997 Agreement on Basic Telecommunications need to apply these principles vigorously.
Incentives for NGN roll-out in rural areas
In some areas (especially in rural areas of developing countries) incentives and subsidies may be necessary. The Telecommunications Regulatory Authority of India (TRAI) has made a number of recommendations in regard to providing incentives for telecommunications infrastructure roll out in rural areas of India (which are worth noting here since these recommendations may also be relevant to other developing countries) including:
• Providing financial support from a universal service fund for sharing of infrastructure.
• Supporting backbone infrastructure through a USO fund.
• Discounting annual license fee and spectrum charges linked to rural coverage.
• Reducing rural VSAT license fees and spectrum charges and provision of transponders at affordable rates.
• Abandoning rights of way charges for networks in rural areas.
• Supporting niche operators from a USO Fund and through exemption from spectrum charges.
• Abstaining from charging spectrum fees for usage of innovative new technologies in rural areas as well as for usage of 450 MHz.
• Requiring no prior permission for deployment of telecommunications towers of up to 40 meters in rural areas.
• Making available funds collected as universal access levies to the USO Fund rather than to general revenue.
But as noted earlier, there may be increasing pressure on the ability of telecommunications operators to contribute to USO funds. In these circumstances, even more effort will need to be made to encourage private sector investment. In this context, the World Bank Group has suggested a number of guidelines relating to the development of initiatives to support private-government partnerships in the deployment of ICT infrastructure in developing economies that deserve attention.
Spectrum Related Issues. Improved spectrum allocation and management is especially important in facilitating network deployment in the rural areas of developing countries. In this context, the best practice guidelines for spectrum management to promote broadband access tabled by the ITU’s 6th Global Symposium for regulators are noteworthy. The broad dimensions of the guidelines include:
• Facilitating deployment of innovative broadband technologies
• Promoting transparency
• Embracing technology neutrality
• Adopting flexible use measures
• Ensuring affordability
• Optimizing spectrum availability on a timely basis
• Managing spectrum efficiently
• Ensuring a level playing field
• Harmonizing international and regional practices and standards
• Adopting a broad approach to promoting broadband access.
6.8 Delicensing spectrum for Wi-Fi and WiMax
Consideration could be given to creating more unlicensed spectrum bands that will encourage innovation and deployment of advanced wireless communication technologies across a country, but especially in rural and remote areas. To provide connectivity at affordable prices and to encourage use of advanced wireless technologies such as Wi-Max, spectrum in 5.7 GHz, 3.5 GHz and 700 MHz frequency range could be delicensed or made available at nominal charges. Consideration could also be given to the use of spectrum trading to allow spectrum to go to the highest-valued uses.
A systematic review of universal access/service programs should be based on (at least) the following considerations.
6.9 Emergency Services
The possibility to make emergency calls and to route the call to the nearest authority (fire department), police, hospitals, etc) is a mandatory element of telecommunications services in a number of countries. Also caller location information is increasingly becoming a requirement for both fixed and mobile telephony. Because VoIP calls can be made from any Internet connection, a major question to be faced is how to provide emergency services with information regarding the caller’s location, which must accompany emergency calls. In VoIP it is possible to maintain the positioning and routing information for emergency calls for a fixed location. However, in nomadic use, at the present level of technological development, the caller position information cannot be made available with the emergency call.
1) Clear and specific articulation of the objectives and coverage of universal service.
It is crucial to specify the intended beneficiaries clearly. In this regard, it would help to break down the broad objective of universal access into a range of distinct, realizable and measurable targets for its sub-components. For example, these targets may include: universal geographic service; universal affordable access; universal access to the disabled; universal quality of service, etc.
2) Identification of barriers to universal service.
Such information is necessary to guide the development of effective universal service policies.
3) Identify schemes that could cost-effectively address the identified barriers to universal service.
To maintain the benefits of a competitive or ‘contestable’ market in the delivery of universal service, the option for a universal service provider to be replaced by a more cost-effective supplier should be preserved.
4) Estimate the cost of programs for universal service
The costing principles, process and outcomes should be transparent and subject to audit; it should be subject to regular disclosure.
5) The relative merits of alternative mechanisms for funding universal service should be considered
The funds to support universal access schemes can come e.g., from taxation revenue, levies on telecommunications users, from telecommunications operators, from licensing and spectrum auction receipts, etc. Whatever the mechanism chosen, it is important to ensure that it s carefully structured and targeted so as to minimize market distortions.
6) Ensure regular public reporting of progress in achieving universal service.
7) Ensure regular monitoring ad evaluation of performance in the delivery of universal service.
The evaluation should include comparison of achievements in delivery against a pre-set delivery schedule and targets.
8) Set suitable universal service objectives based o the level of access provision likely to be sustainable and defining the scope of access.
9) Identify regulatory mechanisms for reaching universal service objectives.
10) Establish a mechanism to raise universal service funds.
11) Facilitate public-private co-financing of infrastructure investments; and
12) Promote local participation in community based access centre initiatives.
Aim to expand communications infrastructure, especially in rural and remote areas, by keeping the market open and ensuring competitive and technological neutrality. This would be consistent with the ‘light-touch’ regulation (including regulatory ‘forebearance’) that seems needed in a dynamic, competitive, convergent communications sector that is expected to characterize an IP-enabled NGN.
Governments can stimulate and facilitate a maximum role of the private sector (while recognizing that government-private sector partnerships can be cost-effective, especially in the case of developing countries) and encourage effective competition that can serve to minimize the subsidies required).
Base universal service programs on clearly defined transparent goals and policy objectives and keep subsidies t the minimum necessary to meet these objectives.
All providers should be able to compete equally for the right to fulfill universal service orders.
The criteria for carriers to be eligible for universal service support should be open, transparent, competitively neutral, and designed so that it does not exclude new entry in favor of legacy monopoly providers. The geographic area that carriers are required to serve should not be so large as to effectively limit support to new entrants/alternative service providers and to exclude other facilities-based providers (other than the incumbent).
Deployment of innovative broadband technologies should be facilitated.
Competitive and technology neutrality should be embraced. Adopt technology-neutral licensing practices that encourage new investments in telecommunication infrastructures and facilitate competition within the sector.
Design USO programs to put competitive pressure on suppliers to supply services at the lowest possible cost.
The use of well designed competitive tenders can (in certain competitive circumstances) help to generate incentives to contain costs, innovate, and reveal the true cost of delivering universal service (thus helping to minimize the subsidy required).
Minimise intervention since, while more substantial intervention might lead to greater short-term benefits, it could potentially stifle a dynamic market process with adverse competitive, economic and even social consequences in the longer term.
Where feasible, target (means-tested?) subsidies directly to those in need.
In countries where there is no ubiquitous fixed line coverage already available, it may be cost effective to encourage widespread rollout by a mobile operator.
Allocate spectrum on the basis of achieving economically efficient competitive and structurally desirable outcomes (rather than to maximize revenue for government).
Encourage improved spectrum allocation and management; optimize spectrum availability on a timely basis; and adopt flexible use measures, including consideration of spectrum liberalisation and secondary trading.
Facilitate sharing of facilities and infrastructure (where sharing can be beneficial, for instance, through accelerated network rollout, potential elimination of unnecessary cost duplication, and minimization of adverse environmental impacts).
In an NGN environment, where effective competition is established on where there is a reasonable prospect of an effectively competitive market in the near term, there are strong arguments for being wary of heavy-handed regulation and the disposition should sensibly be towards light-touch regulation, including regulatory ‘forebearance’.
6.10 Criteria for assessing universal access/service delivery mechanisms
In principle, the selection of implementation mechanisms for universal access/service delivery can be guided by a range of criteria, including:
Sufficiency: Does the mechanism help to ensure comparability of service and rates between urban and rural customers?
Affordability: Does the mechanism enable providers to offer the supported services in an affordable manner?
Competition: Does the mechanism minimize distortions to competition, does it encourage and facilitate competition by precisely targeting support to high cost customers?
Flexibility: Is the mechanism able to evolve as new technologies are introduced, as competition develops and as the definition of universal access/service changes over time/
Protection and advancement: Does the mechanism prevent degradation of the existing infrastructure and the current level of service? Does the mechanism produce an investment incentive to upgrade facilities used to provide universal service?
Portability: Can the mechanism provide all eligible operators with an appropriate amount of support in a competitively neutral manner?
Predictability: Does the mechanism enable an operator to determine in advance the amount of support it will receive on behalf of a customer?
Practicality: Is the mechanism economically and administratively viable?
Transparency: Is the mechanism transparent and open to monitoring and review?
Cost-effectiveness: Does the mechanism enable objectives to be achieved at least cost?
In NGN, broadband subscribers can access VoIP at low prices, bundled with subscription. However, those without broadband will be dependent on voice service from PSTN (which is likely to be degraded as migration to NGN proceeds) or wireless, and this could raise USO concerns related to availability or quality of voice service. In theory, any Internet connection could be used, including dial-up, but dial-up is not widely used to provide VoIP services.
VoIP services typically use a broadband connection to provide voice call services using VoIP technology from either a personal computer (“PC”) and dedicated handset/headset or a traditional telephone handset using an adaptor. There are now a wide and increasing number and variety of VoIP service propositions in the marketplace. For instance, in the UK these include:
• PC-based services that allow calls from one personal computer to another (such as Skype PC-to-PC and Google Talk) commonly referred to as PC-to-PC services;
• Services marketed as secondary line services that allow calls to and from traditional telephone numbers (such as Freetalk, Wanadoo, BT Communicator, Tesco and Gossitel); some of these services include the ability to make calls to emergency services (e.g., 999 in the UK) and some do not;
• Other services that are marketed as replacements for traditional PSTN based call services; typically, the PSTN line remains in place and the VoIP service is then used only for long distance calls; and
• Services targeted for nomadic and mobile use have also begun to enter the market. Voice over Wireless (“VoWLAN”) services is being developed and other services are being deployed that rely on wireless access solutions using licensed radio spectrum.
The approach taken by a number of countries to address the calls to emergency service is noteworthy.
United States. In the US, calls to 911 with traditional phones provide emergency service dispatchers with the caller’s number and address. Internet-based phone providers have limited access to the systems connecting those calls to primary emergency lines and location information is not always available. In May 2005, the FCC adopted rules requiring interconnected VoIP providers such as Vonage to provide emergency E911 service.
Vonage has reportedly concluded agreements with the big local telephone carriers for its customers who dial 911 to be connected to the primary lines in emergency call centres. In the US, VoIP providers do not have unrestricted access to the telephone system built for the nation’s 3 200 emergency calling centres that are owned and controlled by Verizon and the three other Bell operating companies.
So they still cannot successfully route a 911 call to the right emergency calling centre or provide emergency operators with the caller’s phone number and location. This can force the Net-phone companies into less effective ways of routing 911 calls. Rather than being routed directly to trained emergency dispatchers, the calls are typically relayed to administrative lines at call centres, which then transfer them to dispatchers. The concern is that in an emergency, the few seconds lost could be difference between life and death.
6.11 ¼STRONG>Criteria for assessing a sustainable funding mechanism
Broadly, the merits of funding arrangements can be judged according to its implications for:
• economic efficiency – the financing of universal service should distort economic behaviour as little as possible;
• equity – equity is a contentious ‘normative’ criterion’ that may be variously defined/accessed e.g., whether there are similar costs for people with similar abilities to pay, and whether contributions are fair and reasonable;
• competitive neutrality – doesnot discriminate in favour of any company;
• technology neutrality – does not discriminate in favour of any technology;
• certainty – specific, predictable and sustainable arrangements;
• transparency – the opportunity for public scrutiny of information, to the maximum extent possible;
• cost effectiveness – cost effective to introduce (if a new scheme), and cost effective to administer on an on-going basis;
• avoidance – scope for avoidance minimised.
7. Public Call Boxes
Public Call Boxes (PCBs) provide a service that is valued and needed by many people without a phone or those away from home, who cannot, for whatever reason, use their mobile. Many disadvantaged and vulnerable customers still rely on PCBs.
Service for customers with disabilities
Universal Service measures provide access to, and affordability of, a range of essential services for customers with disabilities. A key service is the text relay, which needs to evolve as demand and technology changes.
8. In the United States of America telecommunications, universal service was conceived by Theodore Vail, at AT&T, in the late 1800s; any user could connect. This concept has been extended to users on the Internet.
Universal service is an evolving level of