Bridging the Broadband Divide through Universal Service Funds : Key Principles for Broadband Connectivity Projects in Underserved Areas

Abstract: The rapid emergence of broadband, or always-on Internet, during the course of the last decade, has increased the importance of the so- called information society in urban and industrialized societies world- wide. Liberalized information and communications technology (ICT) market forces worldwide have however failed to supply these services to rural and low-income regions resulting in the so-called digital divide. One financial tool, adopted by many developing nations to drive broadband investments in underserved areas, is the universal service fund (USF), a public fund mainly levying its resources from ICT market players. USFs have previously been used to fund telecom networks but with the growing importance of broadband, structural and regulatory discrepancies are preventing USFs from adequately supporting broadband investments. Currently, little up-to-date academic theory exists within this field; thus, this thesis serves to outline principles that policy-makers and regulators need to consider when designing or reforming universal service fund mechanisms. The research is based on a series of qualitative country case studies investigating policy, procedural, and executional aspects related to USFs and rural broadband. Publicly available material has been complemented with interviews of stakeholders from various levels to establish a holistic empirical base upon which conclusions have been drawn. The conclusions outline principles governing public involvement in USFs, roles played by various stakeholders in the broadband ecosystem, and strategies for rural broadband network deployment.