MICRO PERSPECTIVE AND MACRO

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• MICRO PERSPECTIVE AND MACRO
• SITUATION OF UNIVERSAL SERVICE
• e-rate a (very) basic overview
• K. Wong
• Universal Access Workshop
• Nairobi, Kenya
• March 1-4, 2005

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Agenda

• MICRO PERSPECTIVE
• What is an e-rate (in the US)?
• US e-rate funding
• Some challenges for an e-rate policy
• MACRO SITUATION
• 4. Universal Service in the
• context of other diffusion issues

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What is an e-rate?in the US
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What is an e-rate?

• In the U.S. Subsidized, via discounted rate, of
  telecommunication access for education
  institutions- schools and libraries.
• Section 254 of the Telecommunications Act of
  1996
• Para 6. Schools, health care, and libraries
  should be eligible for special rates and other
  concessions to insure that they have affordable
  access to advanced telecommunications and
  information services

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What is an e-rate?

• All telecommunications carriers will
• provide such services to elementary schools,
  secondary schools and libraries for educational
  purposes at rates less than the amounts charged
  for similar services to other parties.
• The discount and definition of what is
  appropriate, necessary, and affordable will be
  determined by the Federal Communications
  Commission, with respect to interstate services,
  and the States, with respect to intrastate
  services.
• Section 254(h) of the Telecommunications Act.

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What will e-rate apply to?

• Servicesall commercially available
  telecommunications services but not content.
• Equipmentinstallation and maintenance of
  internal connections but not PCs
• Qualifying recipientsschools with endowments
  of less the 50 million

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2. US e-rate funding
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E-rate funding

• 1998
• 1.7 billion 80,000 schools and libraries from UA
  fund.
• 1999
• 2.25 billion recommended by FCC, but cut to
  1.27 billion due to Congressional opposition.
• By comparison
• SA UAF R100 per Year
• 2002 Rural Investment Act provides 200 billion
  in agricultural subsidies over a 10 year period.

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E-rate funding

• 1998
• 1.7 billion 80,000 schools and libraries from UA
  fund.
• 1999
• 2.25 billion recommended by FCC, but cut to
  1.27 billion due to Congressional opposition.
• By comparison
• 2002 SA UAF R100 million per Year
• 2002 U.S. Rural Investment Act provides 200
  billion in agricultural subsidies over a 10 year
  period.

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E-rate discounts
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3. Some challenges for an e-rate?
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E-rate Challenges

• Recall discount for appropriate, necessary, and
  affordable services.
• necessary and appropriate are clearly subjective,
  and definition is therefore a challenge.

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E-rate Challenges

• Definition of affordable is also a challenge as
  it is partially based on cost of the service.
  This is objectively difficult because
• Cost varies by location and time.
• Is difficult to determine in the absence of a
  market.

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E-rate possible critiques

• Why should Telecommunications receive a subsidy
  when textbooks do not?
• Effectiveness of e-learning is a issues of
  debate.
• When the private sector is already making other
  concessions to educational institutions
• Subsidies discourage innovation by the market
  distortion it introduces.
• Competition, not subsidy is the best way to
  drive prices lower.
• These critiques may cause support for political
  opposition.

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• 4. Universal Service in the
• context of other diffusion issues

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Critical Negotiation Issues

• National ICT Policy Issues
• Information Society
• Universal Access
• Services
• Policy-making capacity
• Implementation
• capacity
• Technical Issues
• 11. IXP
• 12. VOIP

• Policy Reform Issues
• Privatization
• Liberalization
• Regulation
• Access Issues
• Access to Facilities
• Monopoly Pricing
• Access Legality

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Critical Negotiations Issues
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Critical Negotiations Issues
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Critical Negotiations Issues
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Critical Negotiations Issues
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Critical Negotiations Issues
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Critical Negotiations Issues
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• Thank you.