1. Jerker Torngren 2. Implementation of USO Comments and some Personal recommendations by Jerker Torngren torngren@aon.at 1

2. Jerker Torngren Minimum services, (slide 1;4) Access Fixed location, not the same as fixed network Primary location/residence only The requirement is limited to a single narrowband network connection No minimum transmission rate (56 kbit/s indicative only) The Directive recommends specific measures for rural or geographically isolated areas. 2

3. Jerker Torngren Minimum services, Affordability The affordability is judged in relation to the national situation The affordability need to be discussed in relation to what can be afforded also for health care, housing and all other necessities. 3

4. Jerker Torngren Affordability. cont Special tariff options can be introduced for low income users. However very few examples exist But if low income users need to be subsidies, perhaps the financial support to them would be better used on something else 4

5. Jerker Torngren Affordability. cont The subscribers should be able to monitor and control their expenditures. Very important issue, which is confirmed by the success of prepaid cards for mobile The operator should be encouraged to offer a number of different tariff structures 5

6. Jerker Torngren Affordability. cont Affordability can be even more complex in light on necessary rebalancing of tariffs. Rebalancing is necessary but also very political Prices based on long term subsidies are not sustainable 6

7. Jerker Torngren Minimum services Take a realistic approach Make sure the market can grow on commercial terms. That growth will generate increased access The operators as a collective can not be forced to invest against commercial realities without harming the market. If all individuals can’t be provided with services, use a community approach 7

8. Jerker Torngren Directory services (slide 1;5) Practical solutions The Directory services falls under the services that shall be provided to affordable prices, should thus not necessarily be provided free of charge. The Directory services are in many countries very profitable for the providers. 8

9. Jerker Torngren Public Payphones (slide 1;6) The implementation Payphones are necessary but less so now than earlier thanks to the penetration rate of mobile. A Public Payphone is not a sufficient solution as “community approach” since it does not provide access to internet. Where there is a need for the payphones, it is frequently also a commercial activity. 9

10. Jerker Torngren Disabled users (slide 1;7) Implementation The EU puts significant importance to e- Inclusion. No-one should due to disability be excluded from using the services. However, a regulatory imposed implementation could be very expensive indeed and would hardly be affordable to a country in transition. 10

11. Jerker Torngren Disabled users Commercial solutions Operators must understand that disabled persons are good customers that provide income. Disabled persons are often in greater need of the phone services than others and could thus generate traffic. To design a payphone so that it is accessible also to a disabled persons costs very little but would be more used. BT has had enormous commercial success with a phone with big buttons originally designed for elderly and persons with impaired sight. Although operators often like to be subsidised, commercial realities could be far more efficient than regulatory interventions. 11

12. Jerker Torngren What can be financed? (slide 1;9) What needs to be financed The EU Directive provides the possibility to set up a financing mechanism. But “external” financing is not obligatory There are very few successful examples within EU of a Fund. 12

13. Jerker Torngren Designation of Undertakings No operator should a priori be excluded. USO could also stand for; Universal Service Opportunities Could be an entrance ticket for new operators No constraints on the technical means by which services should be provided. Also other than fixed line operators could thus be designated. Designation doesn’t automatically necessitate funding 13

14. Jerker Torngren Quality of Service To impose quality of services requirement is often primarily motivated by giving the regulator a good conscience. It is more effective to make sure that the subscribers get consumer friendly contracts. (art 20) The Regulator could assist with advising consumers on their rights. 14

15. Jerker Torngren Personal Conclusion The EU Directive was drafted by EU Member States with in general very good market offerings. The implementation must be realistic, otherwise the growth of the market can be seriously slowed down. If all obligations can’t be met initially, take successive steps in the right direction. 15

16. Jerker Torngren Personal Conclusion. Cont. Global experience shows that efficient provision of the services can only be provided through a well functioning competitive market. Regulatory interventions, being USO or something else, can only be a temporary and rather less efficient solution. 16