Achieving Universal Access and Service

Introduction

South Africa as an emerging economy is faced with a number of developmental challenges. Out of a population of 52 million people, close to half live below the poverty line, whilst unemployment is around 25% and inequality is one of the highest in the world. With respect to access to communication services about 68% of households have radios, 78% have televisions, 24% have computers and only 18% have access to the Internet. Although the country has made great strides in the area of mobile telephony over the past decade, resulting in subscription rates of over 100%, fixed broadband access has lagged considerably during the same period, with the country achieving a world ranking of 115, in 2011.

Recognising the critical role played by infrastructure in accelerating economic development, government adopted a National Infrastructure Development Plan in 2012 and established a Presidential Infrastructure Coordinating Committee (PICC) to drive the plan. A total of 18 Strategic Integrated Projects (SIPs) were identified for implementation. Insofar as communication infrastructure is concerned, the plan envisages broadband coverage for all by the year 2020. This is also underpinned by the National Development Plan, which envisages 100% broadband coverage by 2020, in line with the Department of Communications’ target. Furthermore, government aims to co-invest in projects to provide access to communication infrastructure and services in townships and rural areas as well as connectivity to schools and health facilities.

As seen in Chapter 2, the Framing Paper principles emphasise the right of access to communications infrastructure, content and services by all citizens in all areas on non- discriminatory terms. One way of ensuring access to services by all citizens is through universal access and service (UAS) programmes. UAS refers to policies adopted by governments to ensure that citizens have equal and fair access to a point of communication. While traditionally UAS programmes were aimed at providing fixed telephony, recently the focus has shifted to mobile telephony, Internet and broadband (fixed and wireless), and broadcasting services.

A distinction is made between universal service and universal access to communication services, although the two terms are often used interchangeably. Strictly speaking, universal service is aimed at direct provision of telecommunications, broadcasting or postal services to individuals or households regardless of their geographic location. Universal access on the other hand is aimed at increasing access to communication services on a shared basis, such as on a community or village-wide level. Whilst in the past shared access has been through public pay phones, more recently universal access programmes include the installation of telecentres and cyberlabs equipped with computers for Internet and broadband access.

Generally, there are three pillars to a UAS policy:

Affordability – communication services need to be provided at affordable prices; Availability – communication services should be provided whenever and wherever they are needed, including in remote and rural areas; Accessibility – all citizens should be able to use communication services, regardless of location, gender, disability or any other personal characteristics.

USAASA contends that the above pillars must be expanded to include ‘awareness’ of the use and benefit of communications. Another dimension is that of ‘ability’ to use ICT services, indicating the importance of relevant content and applications to stimulate demand.

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Regulatory Framework to Achieve UAS

Because of the importance of promoting universal service and access in a democratic South Africa, the legislature ensured that it was embedded in legislation as early as 1996 with the promulgation of the Telecommunications Act No 103 of 1996. This was carried over into the Electronic Communications Act No 36 of 2005 (the ECA). Chapter 14 (sections 80-91) of the ECA contains the regulatory framework for achieving UAS in South Africa. Among other things, it provided for the continued existence of the Universal Services Agency (established in 1996) as the Universal Service and Access Agency (USAASA) of South Africa, sets out how the Universal Service and Access Fund (USAF) should be administered and empowers ICASA to prescribe various regulations required for the achievement of UAS, including the following:

Regulations in Respect of the Prescribed Annual Contributions of Licensees to the Universal Service and Access Fund (2011) Regulations on the Definition of Under-Serviced Areas Regulations in Respect of e-Rate

Various efforts have been undertaken in the past to achieve UAS in South Africa, including licensing operators in underserviced areas, establishing a Universal Service and Access Fund, implementing an e-Rate regime for public schools and imposing universal service obligations on licensees. These measures are discussed below.

Universal Access and Universal Service Definitions

USAASA, after a consultative process, made the following proposals regarding definitions, as per its obligation in terms of the ECA, and which were subsequently gazetted by the Minister in February 2010:

1. Universal access is provided where all persons in all areas and communities are able to obtain quality, affordable and usable access to a publicly available minimum set of quality a) electronic communications network service and electronic communications service, including voice, messaging and data electronic communications service and, in the case of data, including a broadband connection, and access to emergency services using free calls and messaging; and b) broadcasting service, including television and sound broadcasting service

2. a) i) Universal service for Electronic Communications Services is provided where all persons. if they require it, are able to obtain quality, affordable and usable access to a minimum set of electronic communications network service and electronic communications service, on either a household or individual basis, including a voice and data electronic communications service and, in the case of data, including a broadband connection. and access to emergency services using free calls and messaging, where all services are offered on a non-discriminatory basis. ii) For the purposes of this determination, affordable means at a rate (including connection and usage charges, but not subscriber equipment charges) that does not exceed a defined percentage of a household's total expenditure.

b) Universal service for Broadcasting Service is provided where all persons have access to a diverse range of television and sound broadcasting services, in terms of three categories of Broadcasting Service, that cater for all language and cultural

2 groups, including persons with disabilities, and which provide entertainment, education and information.

Although the February 2010 gazette also published targets in relation to the above definitions, these largely have not been met.

The Universal Service and Access Fund

Section 87 of the ECA establishes the Universal Service and Access Fund (USAF). Section 89 requires every holder of a licence granted in terms of the Act to make a contribution to the USAF, which must not exceed 1% of the licensee’s annual turnover. The Regulations in Respect of the Prescribed Annual Contributions of Licensees to the Universal Service and Access Fund (2011) set the annual contributions by licensees at 0,2% of their annual turnover and prescribe how and when such contributions are to be paid. Holders of broadcasting service licences who contribute to the Media Development and Diversity Agency (MDDA) may have their contributions to the MDDA offset against their prescribed annual contributions to the USAF.

The purpose of the USAF is to subsidise various activities and sections of the population in attaining UAS including:

Expand the development of ICT infrastructure and extend the reach of ICT network, especially to underserved areas; Assisting needy people in meeting the cost of accessing electronic communications and broadcasting services; Financing the construction of communications infrastructure in underserviced areas; Subsidising the procurement of communication services and access to infrastructure by public schools and further education institutions; and Financing the establishment of broadcasting centres and electronic communication access centres.

USAASA’s 2009/10 annual report indicates that up to that point, the agency had assisted in the development of 362 cyberlabs and 154 telecentres, in addition to the facilitation of Internet connectivity to schools and access centres and further education colleges. It should be noted that this is the reported output after approximatley thirteen years, since its incpetion. In addition, it aims to establish 1 250 new access centres by 2014.

The utilisation of funds in the USAF for some of the above purposes is dependent on the development of certain regulations. For instance, section 90 of the ECA obligates USAASA to provide incentives to electronic communications network service licensees to construct, operate and maintain electronic communications networks in under-serviced areas through the award of project grants. However, before this can happen, ICASA is required to prescribe regulations defining under-serviced areas eligible for construction payments from the USAF. USAASA is also required to make recommendations to enable the Minister to determine what constitutes universal access to electronic communications services and networks by all areas and communities, as well as universal provision of electronic communications services to all people in South Africa. In 2009, USAASA published recommendations to the Minister and ICASA regarding definitions of universal service, universal access, under-serviced areas and needy persons. Out of this process, the Minister of Communications published a notice in the government gazette in 2010 setting out what is regarded as universal access and universal service in the South African context. Similarly in 2012, some six years after the promulgation of the ECA, ICASA published Regulations on the Definition of Under-Serviced Areas, taking into account recommendations from USAASA. This definition is important for purposes of guiding service providers where to roll out infrastructure and services in line with regulations or licence obligations. ICASA is required to review and update this definition, as well as list designated under-serviced areas

3 eligible for construction payments from the USAF. ICASA is also required to make regulations that designate the licensees to whom universal service and universal access obligations are to be applicable.

The following are some of the risks associated with UAS Funds:

They create dependence, requiring ongoing funding. There is potential for financial mismanagement and abuse. Project funding is susceptible to favouritism. There are a number of project failures resulting in waste of public funds. If applied incorrectly, markets may be distorted.

Furthermore, section 88(4) of the ECA provides that the Minister may determine: a) the types of needy persons to whom assistance may be given; b) the persons who must apply for assistance and the manner in which the application must be made; and c) the manner in which and persons to whom, subsidies may be paid.

The Education Rate (e-Rate)

In order to address the affordability of accessing services by specific institutions the ECA empowers ICASA to prescribe regulations regarding the e-Rate. e-Rate can be used to address universal access challenges for schools that already have and/or no infrastructure connection. However, quality bandwidth and the existence of one or several ISPs in the desired geographical areas for the schools to choose from are important factors for the success of an e-Rate programme.

The e-Rate regulations specify the manner of implementing the discount to be offered by service providers to qualifying public schools for access to Internet services. Qualifying public schools are entitled to a total minimum discounted rate of 50% of the total charge levied by Internet Service Providers. The discount is applicable off the total charge levied by the licensee which includes but is not limited to:

any connectivity charges for access to the Internet; charges for any equipment used for or in association with connectivity to the Internet; and all calls made to an Internet Service Provider

The regulations have been beset by implementation challenges, chief of which are related to ambiguities in the Act. The Electronic Communications Amendment Bill (2013) contains proposals to clarify the law in this respect.

Underserviced Area Licences (USALs)

Underserviced Area Licences (USALs) were issued in terms of the 2001 Telecommunications Amendment Act. The idea behind USALs was to extend telecommunication services in under-serviced areas, that is, those areas with a teledensity of less than 5%. As indicated above, service exclusion may arise because users may be living in areas that are uneconomical to serve or have low population density. USALs were also an attempt at promoting entry by SMMEs, historically disadvantaged persons, and women in the telecommunications sector. The Minister of Communications identified 27 areas that were declared as under-serviced. USALs were subsidised from the USAF to the tune of R15 million each to roll out infrastructure over a period of three years.The programme was unsuccessful for a number of reasons including:

Regulatory failure – there was asymmetrical interconnection between USALs and the established operators

4 The subsidy amount was insufficient in relation to the investment required Some of the areas identified included cities that exposed USALs to direct competition from established operators Some USAL operators did not have relevant ICT sector experience and thus were at a disadvantage in negotiations with incumbents on matters of roaming and interconnection agreements. Most USALs could not sustain the burden of financing network development, implementation and operational costs.

Universal Service and Access Obligations

Universal service and access obligations (USAO) refer to various obligations imposed on licensees, related to either their service or spectrum licences. The rationale for USAO stems from the general recognition that in their absence there will be a significant number of people who are excluded from specific services, such as telecommunications, broadcasting or postal services.

Such exclusion may arise for one or more of the following reasons: there may be users who cannot afford the services other users may be living in areas that are uneconomical to serve, given the topography of the area or low population density some users may have special needs, such as the disabled and the elderly

There are various types of obligations that together or individually are generally referred to as universal service and access obligations. Examples include the following:

Universal service obligations (USO) – which refer to obligations that relate to providing services to ensure individual or personal access. Obligations such as line targets, SIM-card and handset distribution would fall under this type of obligation. Community service obligations (CSOs) – which refer to obligations imposed to address community needs, and thus universal access. Community Service Telephones (CSTs), public payphones and Internet access to schools, would fall under this category. Basic Obligations – which are imposed on licensees to address what is considered basic requirements of communications such as directory services, emergency services, minimum standards, quality of service and addressing the needs of people with disabilities. Network rollout obligations – which set out population and geographic targets infrastructure rollout targets. Broadcasting obligations – encompassing both the content of programming and the extent to which it meets the needs of various segments of the population in terms of culture and language as well as physical access to broadcast programmes. The obligations placed on the public broadcaster, for instance, to provide programming that meets the needs of children, various ethnic groupings, language, and religion ensures that broadcasting services are accessible to all South Africans. The ‘must carry’ requirements on the other hand ensure universal transmission, or coverage, of broadcasting services.

Telecommunications service providers licensed before and after the promulgation of the Telecommunications Act No. 103 of 1996 (Telecommunications Act), such as Telkom, Neotel, Cell C, MTN, Vodacom, iBurst, and Sentech had various obligations in their licences. Broadcasters had language, local content and general programming obligations while value- added network service providers (VANS) did not have any obligations imposed on them.

5 Following the promulgation of the Telecommunications Act, Telkom was offered exclusivity in the provision of fixed line telephony in South Africa between 1997 and 2002. In exchange for being shielded from competition, Telkom had service rollout targets stipulated in its licence. The USO targets were primarily based on addressing under-serviced communities that had a teledensity of less than 5%. At the end of the exclusivity period, Telkom had missed most of its targets and had to pay penalties.

The three mobile network operators, Vodacom, MTN and Cell C had network obligations in their licences in terms of which they had to provide network coverage in the form of population and geographic targets within specified timelines. They had an obligation to contribute to a universal service fund and had CSOs to roll out community service telephones over periods that varied from five to seven years, and they had to provide Internet access to public schools and public hospitals/clinics.

Furthermore, in exchange for access to the 1800 MHz frequency spectrum, MTN and Vodacom were required to collectively provide 250 000 handsets and five million SIM cards to identified government departments and some civil servants over a five-year period. This obligation was not fulfilled but instead was overtaken by market forces, resulting in universal service coverage of more than 100%, if multiple SIM-card ownership is not discounted. Neotel’s licence required the establishment and maintenance of high speed Internet connectivity to public education facilities and rural public clinics. The lessons learnt from the imposition of obligations on other licensees enabled ICASA to ensure that the implementation of Neotel’s CSOs had to be in accordance with an Implementation Plan to be agreed to between the two parties.

Sentech’s multimedia service licence required the provision of Internet services to schools in under-serviced areas over a six-year period. Sentech’s CSOs was generally a shift from the normal provision of universal services and access towards the provision of enhanced services such as multimedia, computer laboratory and Internet. Largely due to the costs of setting up the network infrastructure, financing of school laboratory equipment and setting up of dedicated computer laboratories, Sentech was not very successful or effective in implementing its CSO goals. iBurst’s obligation when it received the national mobile data telecommunications licence in 2004 was to provide rural and urban public schools with Internet access by 2011.

There have been mixed results with respect to compliance by licensees. For instance, Telkom did not fully comply with its obligations and had to pay penalties in this regard. The rollout of Internet connectivity/access and terminal equipment to public schools was delivered to some extent but not fully, while roll-out to rural clinics/hospitals was not done. With respect to community service telephones, all three mobile operators exceeded their rollout targets. However there were instances when this was achieved by rolling out services in areas that could be considered to have sufficient access to telephony services, particularly in urban areas. Nonetheless, the CSO model has been considered a success in many respects.

Neither Neotel nor iBurst were fully compliant with their licence obligations and cited, among others, the non-allocation of schools for roll-out purposes, the inadequate number of public institutions available compared with the number stipulated in the licence, and the lack of coordination among the relevant government departments.

The promulgation of the ECA required the conversion of licences issued in terms of the Telecommunications Act. Licensees were then issued with one or more of an Electronic Communications Service licence, an Electronic Communications Network Service licence, a Broadcasting Service licence, or a spectrum licence that embodied the previous obligations.

6 However, there are instances where certain obligations were not carried forward into the new licences.

In 2010 ICASA undertook research and held a consultative process to review the universal services and access obligation framework and to evaluate the extent of compliance with obligations. This process was concluded in 2012 and the findings were as follows:

The obligations imposed prior to the ECA and carried forward in the converted licences are still binding; Licensees are able to renegotiate that certain obligations, which have not been implemented, be suspended. This in accordance with Section 10 (1)(g) of the ECA; All licensees, ECS, ECNS & BS, will be subject to payments of USAF as required in terms of section 89 of the ECA. All such funds will be used to advance universal service and universal access as required in section 90 of the ECA; Licensees from the same category need not be subject to the same obligations by virtue of type of licence category alone, other factors must be considered; As long as consumers benefit from the service/s there is no need to review the obligations; and As such, the operators’ universal service and access obligations remain as agreed prior to the coming into force of the ECA and the subsequent conversion of the various licences.

Furthermore, ICASA took a decision that out of many models available, licensees will be subjected to the ‘pay and play’ principle. This means that licensees will continue to contribute into the USAF. However, they will also be given obligations and opportunities to carry universal service obligations and participate in the USAF.

Other Measures

Apart from the above regulation and licence-related measures, there have been other attempts to promote UAS in the country. There have been initiatives by provincial and local governments to increase access to services, such as the erstwhile Gauteng Online project and the deployment of fibre optic networks by various local governments. According to the SADC guidelines, as Internet and broadband access begin to fall within the scope of universal access definitions and targets, public-private partnerships are moving beyond just network operators and government to include equipment suppliers, vendors, manufacturers, academics, civil society and communities.

Critical Success Factors for USAOs

According to the WTO, member countries may define the kind of universal service obligations they wish to maintain, so long as these are not anti-competitive, are administered in a transparent, non-discriminatory and competitively neutral manner, and do not create unnecessary burdens on service providers. In addition, USAO interventions need to support national imperatives, government policies, and strategic direction. They need to be aligned with legislation and there needs to be a clear market access gap that must be considered in their design.

Well-designed and defined universal access projects are those that take into account the following factors:

Basic project parameters such as availability of electricity, rights of way, local sensitivities, the ability of users to pay, etc; Optimal backbone capacity requirements;

7 Other competing and/or complementary infrastructure projects; The potential impact of competing technologies; Particularities of the community and region to be served, including its topography, economic activity, income, population density, local politics and other constraints; The cost to rural operators of various taxes, licence, spectrum usage and other fees, performance bonds, missed target penalties, borrowing, reporting requirements and the transaction costs of administering the subsidies; Operators’ need for predictable cash flow; and The need for an optimum balance between public and private sector contributions and risk sharing.

Moreover, USAOs also need to:

Have clearly defined conditions and requirements imposed on operators and service providers, including quality-of-service obligations and a minimum set of qualifications required for administrators of rural community telephones, telecentres and rural telephone companies; Allow operators/service providers freedom to choose any technology they wish to deploy so long as it meets certain standards to ensure compatibility, avoid interference, and to protect consumers; Permit other non-subsidised services to be provided; Contemplate providing one-stop shopping for all service licences; Have licence conditions with certain flexibility to cater for changing technologies and circumstances; Have performance indicators that take into account the particular circumstances under which rural operators have to provide service; and Be accompanied by business plans that confirm their sustainability during the life of the project. (Each project should be subject to a cost-benefit analysis to determine its benefit to the people who will be served).

Future USAOs need to be clearly defined, robust, achievable, and enforceable.

Current Institutional Arrangements Driving Universal Service and Access

The responsibility for universal access and service is currently shared among different government agencies. The Department of Communications is responsible for the policy framework and has played a critical role in the community radio space as indicated in the chapter on broadcasting. ICASA, USAASA and the MDDA are the main players in terms of implementing government policy and legislation on UAS.

Independent Communications Authority of South Africa

ICASA is responsible for regulating the telecommunications, broadcasting and postal industries. It aims to promote affordable services of a high quality for all South Africans.

ICASA promotes the attainment of universal service and access by requiring operators, through their licences and regulations, to roll out services in under-serviced areas and ensure that they contribute to the Universal Service and Access Fund. ICASA does not, however, administer the Universal Service Fund, but merely receives monies on behalf of the Universal Service and Access Agency of South Africa (USAASA). Its functions also include making recommendations to the Minister on policy matters, which accord with the objects of the ICASA Act and the underlying statutes to promote development in the postal and electronic communications sectors. In doing so, it may conduct research on all matters

8 affecting the postal and communications sectors in order to exercise its powers and perform its duties.

Universal Service and Access Agency of South Africa

USAASA was established in 1997 (as the Universal Service Agency) in terms of the Telecommunications Act of 1996. Initially the Agency was tasked with a mandate for a period of five years, to be reviewed at the end of the period. At the time the establishment of a separate institution, alongside the regulator, with an explicit mandate to promote universal access and universal service, was unique in the world. This demonstrates the commitment of government at the time to these objectives. With the repeal of the Telecommunications Act, USAASA continued to exist as per Section 80 (1) of the ECA and was henceforth called the Universal Service and Access Agency of South Africa.

USAASA is established with the sole mandate to promote the goals of universal access and universal service. It is accountable to the Parliament of the Republic of South Africa and the general public.

USAASA has set itself the following strategic objectives to: provide universal service and access strategy, policy and leadership; facilitate interventions in ensuring affordable and equitable access and usage; monitor and evaluate effective use and social appropriation; efficient and effective management of the Universal Service and Access Fund.

Media Diversity and Development Agency

The MDDA was established in terms of the Media and Diversity Development Agency Act of 2002 (MDDA Act). The objectives of the MDDA include the promotion of development and diversity in the South African media throughout the country, consistent with the right to freedom of expression as entrenched in Section 16 of the Constitution. The objectives also include: encouraging ownership and control of and access to media by historically disadvantaged communities, as well as by historically diminished indigenous language and cultural groups; encouraging the channelling of resources to the community media and small commercial media sectors; supporting initiatives that promote literacy and a culture of reading; and encouraging research regarding media development and diversity.

Access Gap Analysis

An important step in extending universal access to under-serviced areas is identifying access gaps at national, provincial and local government level. The market efficiency gap is the difference between the current level of access and network reach and what the market is able to provide supported by proper policy and regulation. A smart subsidy zone is an area that requires a once-off, non-distorting subsidy in order to become commercially viable. A true access gap is a high cost, low-income area requiring ongoing financial and policy support. The universal access gaps can be addressed through different mechanisms. Areas that are commercially viable can be assisted by lowering the economic barriers to market entry. Investment in infrastructure could be subsidised, either directly for designated networks and/or via competitive tendering for projects that qualify for support from universal service and access funds. Operators can be encouraged or incentivised to enter into infrastructure sharing arrangements. Programmes that offer communal access to electronic communications services can be implemented for those customers who cannot afford to pay commercially viable prices. Smart subsidy zones on the other hand can be financed through

9 once-off USAF subsidies and grants. Most UAS programmes are targeted at closing the true access gap.

Early in 2013, USAASA undertook an access gap study to inform a national strategy on UAS. With regard to basic 2G mobile voice telephony, the study found that existing gaps are quite small, and the areas that appear to be outside the market frontier are limited to a few provinces. The analysis indicates that commercial operators should be able to expand their coverage to reach a large majority of those locations and population centres where 2G service is not yet fully available. Moreover, where there are other non-economic barriers that have impeded network development they should be addressed on a case-by-case basis.

The study further found that in areas where there are significant access gaps in the 2G mobile market, the main factor driving these gaps is a combination of the income level of the local population and a reluctance of operators to roll out their network to areas they deem unviable. Such areas include various small settlements, dispersed population groups, and sparsely settled areas that may not have mobile network coverage.

Insofar as 3G mobile broadband is concerned, the market has been able to deliver services to a greater section of the population and continues to do so. The picture for public broadband access on the other hand is one with challenges and opportunities. Current coverage of broadband network access at the local level is in the range of about 50% of the country. According to USAASA, the exact number of towns and villages in which some form of public broadband is available – whether in schools, in multi-purpose community centres (MPCCs) or other public centres – is difficult to specify, but it appears likely that some such facilities are available in about half the population centres of the country, at least at the local municipality level. Moreover, it appears that there is room for the market to expand such public broadband coverage to at least another 25% of the country.

The study observes that in examining the underlying factors influencing the size and cost of these gaps, it is evident that backbone network connectivity has the most significant influence on the market status. To deliver any broadband level service at the local municipal or town level requires a high capacity backbone connection into each such location. Where fibre optic technology is the assumed approach, the costs of extending fibre networks to all population centres, especially the most distant and dispersed areas, can be extremely high.

Moreover, beyond backbone connection, there are additional costs for local access connections, equipment, and service operations associated with local public broadband services. Where such service is provided via public telecentres or MPCCs, there are ongoing management and facility costs; where school or government connections are provided, similar internal operating equipment, and management costs are required.

It is also important to note that programmes that emphasise affordability of computers, smart phones, and other end-user equipment can help to bring down costs while allowing more users to experience the benefits of broadband. Initiatives to expand the scope of available ICT applications and content that are of interest to local populations, including private, locally developed apps, and e-government, e-health, and e-education services, can also have a significant effect. Importantly, general training and capacity building components of any universal access programme are an essential element to generate effective utilisation and benefits.

Also, the introduction of public access broadband services in smaller towns and villages can allow for a wider dissemination of such access beyond fixed facilities. By attaching the broadband point-of-presence to a local wireless transmission network, whether WiFi or a short-range microcell service, users with smart phones, laptops, dongles, or other personal equipment can obtain broadband connectivity in nearby homes and businesses, and even

10 on a mobile basis within their communities. This type of approach can multiply the benefits of public broadband deployments many times, moving towards universal broadband access.

Emerging Challenges and New Possible UAS Approaches

Universal access and service has been evolving over time. Whilst the focus of UAS programmes in the past was telephony, attention is now shifting towards the Internet and broadband. There are differences of approach between developed and developing countries in terms of universal access and service policies and programmes. For instance, in the European Union a service should only qualify for US or UA investments when it has achieved majority penetration through commercial or market forces. In developing countries such an approach may not yield desirable outcomes since it may take years for market forces to be able to deliver services to a wider section of the population.

Universal service and access programmes should also pay attention to other gaps in the system, such as the availability of electricity, which would enable network services to be available on a reliable basis in remote and rural areas. If adequate power is not reliably available from an electricity grid, investments in additional, and, where feasible, renewable energy sources, such as solar energy, should be eligible for universal service and access funding.

The advent of broadband provision as a recent focus area for universal service requires attention to backbone as well as access networks and the availability of affordable terminal devices. There needs to be coordination among the three spheres of government since there are a number of broadband roll-out projects taking place at provincial and municipal levels.

The transition from analogue to digital broadcasting services requires the subsidisation of set-top boxes to allow citizens uninterrupted access to broadcasting services. In terms of broadcasting, its coverage, availability, accessibility, language and local content also need to be taken into consideration. The role of state-owned entities such as Broadband Infraco and Sentech in universal provision of broadband services also needs to be explored and exploited.

As the country’s technologies develop and evolve, additional services are beginning to form a new basis of expanded universal services. These include:

broadband services telemedicine services telemetry and remote sensing, control and monitoring smart metering services and solutions – automated meter reading (AMR), remote power load management and consumption trends analysis

The experience of implementing UAS, coupled with lessons from international benchmarking, has highlighted the importance of the following factors, with regards to the provision of community or school based, ICT centres:

Maintenance - Due to past experiences within the existing community telecentres and cyberlabs, it has become even more important to consider sustainability through support and maintenance of universal service access points beyond the build-out phase. The true value and success of a communications access point is the long- term continued utilisation and successful operation and support of the facility by the intended beneficiaries; Training - Very often many potential users are, at least initially, intimidated by new technologies. To continue supporting a growing user base of the services available in

11 telecentres and cyberlabs requires a fair amount of investment in attracting, retaining, and re-skilling customers and users; Local partnerships - Working with local partners enhances the level of trust and support the community attaches to universal service and access projects Diversity of services - The notion of providing a bundle of services at a single outlet tends to be a good practice as it builds an opportunity for beneficiaries to achieve a more diversified product range from a single facility. Multi-stakeholder partnerships - UAS programmes, by their nature require effective partnerships, not least of which are the targeted local communities as well as local government. International experience indicates that bottom-up community-based- processes are more effective. Governance and ownership – Given the nature of these centres, it is not practical, nor sustainable for them to be managed as a national programme. The role of entrepreneurs (such as in the LAN-houses in Brazil), local government, and the local community may be considered in a number of different permutations to ensure sustainable operations.

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