1. 1 China Country Report FINAL INTERNATIONAL WORKSHOP ON RURAL ICT DEVELOPMENT Governments Institutional Structure

2. 2 Introduction of Village-access Project January 16, 2004, the Ministry of Information and Industry enacted the Notice on Developing the Village-access Project in Pilot Provinces and Regions, and meanwhile enacted the Rural Communications Universal service----Plan on Implementation of the Village-access Project as a solution in the transitional period when the universal service fund has not been completely set up. The Village-access Project requires the basic telecom operators undertake the obligations of the communications universal service with adopting the area slicing contract system. In China, the telecom universal service is pushed based on the approach of the Village-access Project.

3. 3 Framework of the Village-access project Organizer: Ministry of Information and Industry (current Ministry of Industry and Information Technology) Executor: six state-owned basic telecom operators---- China Telecom, China Mobile, Chine Netcom, China Unicom, China Satcom and China Tietong Implementation time: From 2004 to 2010 or even more longer Goal: all villages have access to the phone; all towns have access to the Internet. Push the development of information technologies in the country.

4. 4 Progress of the Village-access Project Goals to enhance rural economy and social development; to reduce the digital divide. Steps Step one: universal access help rural areas establish telephone related infrastructure; Step two: increase the density of phones in the country; Step three: push the development of information technologies in the country;

5. 5 Progress of the Village-access Project Schedule : 2004: Initiate pilot work in 13 provinces, experiment in 9400 villages and install 50 thousand phones in rural areas. 2005: The project comes to an important phase and is developed in the whole country. Establish fixed-line or mobile communication facilities in 45 thousand administrative villages that have no phones, with an increase of rural subscribers of 2.5 million households. 2006: Continue to implement the Village-access Project in the 16 provinces that have no access to phones; complete the infrastructure construction in 14 thousand villages that have no access to phones. 2007: Continue to implement the Village-access Project in 7 provinces and extend to the villages in other 19 provinces. By the end of 2007, all administrative villages in China have access to phones and more than 20 thousands administrative villages which have at least 20 households should have finished Village-access Project.

6. 6 Measures of the Village-access Project Management system: The project is managed by ministerial and provincial level authorities, supported by local governments and carried out by enterprises. The administrative ministry (former Ministry of Information and Industry) is responsible for making Village-access Project related policies. Provincial communication administrations are responsible for the coordination of local Village-access Project, supervision and examination, guiding and promotion and the assessment. The Ministry of Information and Industry and provincial communication administrations wont interfere enterprises operation, but will supervise them and assess their work progress. The government has made some specific measures on the Village-access Project in organization management, technologies, resources and tariff.

7. 7 Measures of the Village-access Project Implementation approach: Each telecom operator having the nationwide basic telecom service will undertake part of the Village-access Project in its province, i.e. area slicing contract system. The detailed approach is to treat the 31 provinces, cities and municipalities as 31 universal service regions (Imagine all the 31 regions have some services that need subsidies.); assess the universal service in each region and assign tasks to operators according to the assessment. The obligation quantity undertaken by an operator should be in direct proportion to the income the operator gets from the telecom service market. Technology: Enterprises should first adopt the technology that is allowed to use within the permitted service scope. If an enterprise would like to use another access way other than permitted technologies, the enterprise should report to the Ministry of Information and Industry for approval and report to the provincial administration for record.

8. 8 Measures of the Village-access Project Frequency assignment: Enterprises that undertake the Village-access Project have a priority to be assigned the wireless access frequency of the project province. Tariff standard: For the tariff standard of rural communications, telecom enterprises can make various favorable tariff policies. New tariff standard should be reported to the Ministry of Information and Industry or provincial communication administration for approval or record. Considering the affordability of rural residents, the tariff standard should not be higher than the current tariff standard. No matter what technology is adopted, the tariff standard for the public phone that is watched by some person should not be higher than that of the fixed public phone. Assessment of progress: Provincial communications administrations should verify the work of enterprises every quarter every year and report the progress to the Ministry of Information and Industry. The Ministry collects these assessments and then reports to the State Council, local governments, operators, the public and the media.

9. 9 Effects of the universal service Year 2006-2009, Village-access Project accumulative total built telecom basic infrastructure for 20304 administrative villages, the administrative villages having phones had an increase of 2.76%, reached to 99.86%; accumulative total Help 76651 villages have access to phones, the proportion reached 93.4%; Up to the end of 2009, the proportion of town has internet access reached 99.3% in the whole country, 96.8% of the town has broadband access, 91% of the town has the condition to access to the broadband.

10. 10 China Academy of Telecom. Research, MIIT. Teleinfo institute Tel 86-10-62301302 86-10-62301730 Fax 86-10-62304136 Email teleinfo@catr.com.cn teleinfo@catr.com.cn Thank you!