Committed to Connecting the World Broadband Funding Mechanisms Nancy Sundberg, Senior Programme Officer Telecommunication Development Bureau (BDT) International.

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Presentation transcript:

Committed to Connecting the World Broadband Funding Mechanisms Nancy Sundberg, Senior Programme Officer Telecommunication Development Bureau (BDT) International Telecommunication Union (ITU) International Workshop on Broadband Pretoria, South Africa, November 2013

Committed to Connecting the World Setting the regulatory scene Source: ITU World Telecommunication Regulatory Database  Some 57 per cent of countries in Africa have a partially or totally private incumbent operator  Competition in most ICT markets is the norm in the region  91 per cent of countries in Africa have a separate regulator Regulatory trends worldwide

Committed to Connecting the World Creating an enabling environment Regulatory reforms Create an enabling environment fostering private investment and innovation by: – maintaining a level playing field among all players – stimulating inter and intra platform competition – removing entry barriers – encouraging open access – technology neutrality – Spectrum licensing (refarming) – Rights of way – Infrastructure sharing – Unbundling – Tax incentives – Investment incentives When private investment isn’t enough – Direct government investment (Equity participation) – Public private partnerships (PPPs) – Dedicated Funds – State aid Extending the definition of “universal service” and “universal access” to broadband – Use of Universal service Funds

Committed to Connecting the World Means of financing broadband plans, 2012 Source: ITU World Telecommunication Regulatory Database Increasing reliance on Public Funding for high cost broadband networks

Committed to Connecting the World Funding mechanisms a regional perspective 2012 Source: ITU World Telecommunication Regulatory Database

Committed to Connecting the World Universal service funding worldwide, 2012 Source: ITU World Telecommunication Regulatory Database 76 USFs are operational worldwide

Committed to Connecting the World Operational Blueprint for a Successful USF Well-articulated policy with respect to how Universal Service (US) will be achieved and organized Development of an appropriate and well-defined legal and regulatory framework permitting maximum flexibility Establishment of the USF as separate, independent (autonomous) entity Clear definition and delineation of fund responsibilities Development and clear definition of measurable overall Fund objectives which can subsequently be tracked and monitored High level of transparency, visibility and accountability to all stakeholders Active participation in and input from all concerned stakeholders regarding fund objectives and administration Guidelines and procedures for working with other funding sources Ensure that full range of sustainability elements and ancillary services are taken into consideration in both policy formulation and project definitions Fair and unbiased process to allocate subsidy and /or project Incentives for project participants The need for digital inclusion as part of the USF Addressing USF challenges

Committed to Connecting the World Developing successful PPPs to foster investment in broadband networks Using public funds more effectively Monitoring outcomes, to ensure the project achieves the aim of providing broadband access or services to the locations/people it is supposed to target Managing risks, to ensure it is delivered on time and within budget Stimulating and creating demand to ensure the broadband infrastructure is used effectively.

PPP Methods to fund broadband projects Bottom-up or local community model Private Design Build and Operate (private DBO) model Public outsourcing model Joint venture (partnering) model Public Design build and operate (DBO) model 9 Committed to Connecting the World

Best practices in establishing successful PPP projects Conduct a public consultation Be technology neutral Conduct pilot projects Provide funding in line with milestones and targets Mandate open access and monitor compliance Consider multiple investment models and funding Consider setting up parallel initiatives to stimulate demand 10 Committed to Connecting the World

Consider multiple investment models and funding  Mixed broadband projects may consider – different investment models – different funding sources  Setting up parallel initiatives to stimulate demand - To be funded publicly, privately or through PPPs 11 Committed to Connecting the World

A mix of private and public funding Private operators are investing in infrastructure deployment Government investment in the adoption and promotion phases and in building e-government applications USF financing used to create free WiFI hotspots and to address connectivity issues where there is real-access gap Mauritius Kenya TEAMS: PPP between the government of Kenya and Etisalat, United Arab Emirates (UAE) to construct and manage a submarine cable between Kenya (Mombasa) and UAE (Fujairah) Private investors (83% ) and government of Kenya (17%) (Ministry of Finance) All consortium members can sell capacity (at wholesale and retail levels) equivalent to their share of the cable capacity

Committed to Connecting the World More examples Public funding only: Australia’s NBN Co Government-owned wholesale-only open-access network Government to sell down its interest in the company within 5 years after the network is built and fully operational Structural separation of the incumbent Telstra’s wholesale and retail services Malaysia The high-speed broadband (HSBB) service: FTTH to the main economic areas funded by government grants through a 10 year PPP agreement The Broadband to general population (BBGP) using less advanced access technologies and rural areas are funded through the USF

Committed to Connecting the World GSR10 Best Practice Guidelines IIIOpen networks: how to ensure that every citizen has access to the benefits of ubiquitous broadband networks We recognize that efficient allocation and assignment of the digital dividend spectrum, will result in social and economic benefits that could stimulate innovation for the provision of lower-cost communications and services, especially in rural and remote areas. We suggest that governments update the definition of universal service as needs evolve to ensure technology neutrality and the inclusion of broadband access. We note the need to put in place concrete national plans and strategies to stimulate deployment of broadband networks, particularly in developing countries. Furthermore, given the challenges in attracting investment for large scale deployments, these strategies should consider the role of the state in funding the national broadband infrastructure, inter alia through Public Private Partnerships and promoting the involvement of municipalities or cities. We stress the importance of legislation to set out the general principles of open access –non- discrimination, effectiveness and transparency – highlighting the importance of both active and passive infrastructure sharing in the deployment of electronic communications networks in property owned by any operator, private entities and public bodies, even if they are operating in other sectors We recognize the importance of wholesale regulation, including the obligation to publish reference offers for access to essential facilities and prices oriented to costs, as means to ensure open access.

Committed to Connecting the World on regulatory approaches to advance the deployment of broadband, encourage innovation and enable digital inclusion for all I. Funding mechanisms for promoting the deployment of broadband infrastructure II. Fostering private investment in broadband through incentive regulation 1)Leveraging partnerships; and 2)Modernizing universal service programmes and funds. 1)Providing overall direction through a national policy,; 2)Rationalizing licensing regimes; 3)Making spectrum available for mobile broadband; 4)Removing barriers to broadband build-out and access to broadband networks; 5)Granting tax incentives. GSR11 Best practice guidelines

Committed to Connecting the World ITU Reports Broadband Thematic reports in 2013:  Developing successful Public-Private Partnerships to foster investment in universal broadband networks  Competition and regulation in a converged broadband world  Net neutrality: a regulatory perspective  Spectrum policies in a hyperconnected digital mobile world  International roaming services: a review of best practice policies  Global and regional IP interconnection Trends in Telecommunication Reform 2013 : Transnational aspects of regulation in a networked society Regulatory, Economic and Financial Reports 2013:  Strategies for the deployment of NGN and NGA in a broadband environment – regulatory and economic aspects  ITU Study on Taxing telecommunications/ICT services: an overview  Regulating broadband prices  International Internet Connectivity in sub-Saharan Africa