Beyond Broadband Access: Developing Data-Based Information Policy Strategies

CHAPTER 12 Using Data for Policy Development

209 CHAPTER 12 Using Data for Policy Development Designing a Universal Service Fund for Tanzania heather e. hudson Many developing countries have established universal service funds to subsidize the extension of a telecommunications infrastructure to areas that are unattractive to private investment because of high costs or low revenue potential. There are many challenges in implementing these funds, particularly where there is little experience in estimating demand for new services such as Internet and broadband, and limited time and resources to collect field data. This chapter examines how data, primarily from existing sources, is being used to implement a universal service fund for Tanzania. It is presented as an example of relying primarily on existing data from multiple sources and from local researchers that could be used in other developing regions where time or resources to conduct dedicated field studies may be limited. The government of Tanzania (population about forty million, of which 80 percent live in rural areas) has approved the creation of a Universal Communications Access Fund (UCAF) to extend communications services to unserved and underserved areas of Tanzania, primarily in rural regions. Initial primary emphasis is to be on the extension of voice telephony to rural areas without connectivity and provision of public access to the Internet in rural communities. The author was a member of a team providing advice to the Ministry of Communications, Science and Technology on implementation of the UCAF, including definition of services, identification of unserved and underserved areas, prioritization of access requirements, and design of procedures to allocate funds.1 Preliminary studies of availability of telephony through mobile phones and fixed lines and projections of demand had been conducted, but there heather e. hudson 210 was a delay of four years between the initial studies and the final authorization of the UCAF. In that time period, mobile penetration had increased dramatically through licensing of several competitive providers, but there appear to be remaining gaps in coverage in some rural areas. Pricing is also a deterrent to use among low-income populations. The government has indicated strong interest in including support for Internet service, primarily through public access, which could include post offices, telecenters (publicly accessible locations with computers and Internet access), Internet cafes, and other entrepreneurial outlets, and possibly schools. Key questions to be addressed included: What priorities should be used to provide total voice coverage in Tanzania, in terms of criteria such as population densities, geographic areas, or estimated demand? Could innovative technological solutions and business models to extend Internet access be fostered through financial incentives from the UCAF? Could broadband services be extended with support from the fund without waiting for the completion of 100 percent coverage for voice services? What services were likely to be provided, and what regions would gain access, through operator investment without subsidies? Since funding and time for field research were limited, the availability and interpretation of existing data were important in understanding the extent of the gap in availability and affordability, and for identifying viable models of shared access to Internet services in most rural areas of the country. Where field research appeared necessary, involvement of local researchers from universities, development organizations, and local consulting firms was recommended to conduct the studies. tanzania and its telecommunications sector Located in the east part of Africa, Tanzania has a land area of about 342,000 square miles (about twice the size of California) and a population of 41 million of whom approximately 45 percent are under the age of 16.2 Classified as a low income or least developed country, Tanzania has a per capita income of only about $400,3 although the amount in terms of purchasing power parity (PPP) is estimated at $1200. About 70 percent of the population is rural. After independence in 1964 (with the merger of Tanganyika and Zanzibar), President Julius Nyerere implemented a socialist agenda, which increased access to primary school education and basic health care, but left a stagnating economy. Following liberalization of the economy in the past decade, the economy has grown more than 7 percent annually since 2002, but with an average inflation rate of 5.2 percent.4 Liberalization has been accompanied by increased entrepreneurial activity in the informal sector, more foreign aid, expansion of mining and exports of raw materials, and increases in commer- usin g d ata fo r po l i cy d ev e lo...