• The Universal Service Obligation Fund (USOF) signed an agreement with Bharat Sanchar Nigam Limited (BSNL) to provide support for availability of high-speed internet access to northeast states.

• The availability of high-speed internet access would help the citizens in accessing various e-services such as e-governance, e-education, e-health, e-commerce, e-banking, amongst others.

• Under the agreement, USOF would extend financial support to BSNL for a period of three years for hiring of 10 Gbps International Bandwidth for Internet Connectivity to Agartala from Bangladesh Submarine Cable Company Limited (BSCCL), Bangladesh via Cox Bazar/Kuakata.

What is Universal Service Obligation Fund (USOF)?

• Universal Service Obligation Fund (USOF), formed by an Act of Parliament, was established in April 2002 under the Indian Telegraph (Amendment) Act 2003 (further amended in 2006), to provide financial support for the provision of telecom services in commercially unviable rural and remote areas of the country. 

• It is an attached office of the Department of Telecom, and is headed by the administrator, who is appointed by the central government.

• The resources for implementation of USO are raised by way of collecting a Universal Service Levy (USL), which is 5 per cent of the Adjusted Gross Revenue (AGR) of Telecom Service Providers.

• Universal Access Levy amounting to Rs 1,12,029 crore has been collected and the total allotment amounting to Rs 56,328.45 crore received through Parliamentary approvals has been utilised to fulfil the objective of USO Fund.

• It is a non-lapsable Fund. Levy amount is credited to the Consolidated Fund of India. Fund is made available to USOF after due appropriation by the Parliament.

• Initially, the USO Fund was established with the fundamental objective of providing access to ‘basic’ telecom services to people in the rural and remote areas at affordable and reasonable prices.

• Subsequently, the scope was widened to provide subsidy support for enabling access to all types of telecom services, including mobile services, broadband connectivity and creation of infrastructure like OFC in rural and remote areas.

The concept of universal service

• In 1837, the concept was pitched by Rowland Hill with his postal reforms, a British educator and tax reformer, which included uniform rates across the United Kingdom and prepayment by sender via postage stamps. 

• In 1907, AT&T president Theodore N. Vail proclaimed universal service to be a key corporate goal.

• In the modern world, universal service refers to having a phone and affordable phone service in every home. It means, providing telecommunication service with access to a defined minimum service of specified quality to all users everywhere at an affordable price.

• The Constitution of the International Telecommunication Union (ITU), Article 1(d), provides that one of the purposes of the Union is to promote the extension of the benefits of the new telecommunication technologies to all the world’s inhabitants.

• The precise parameters for universal service are usually set by national law or regulation, or may be contained in the license of the dominant operator.

Origin of Universal Service Obligation Fund (USOF) in India

• The New Telecom Policy 1999 of the department of telecom emphasised on universal service as part of its main objectives.

They are:

• Strive to provide a balance between the provision of universal service to all uncovered areas, including the rural areas, and the provision of high-level services capable of meeting the needs of the country's economy.

• Encourage development of telecommunication facilities in remote, hilly and tribal areas of the country.

• The New Telecom Policy 1999 provided that the resources for meeting the Universal Service Obligation (USO) were to be generated through a Universal Access Levy (UAL), at a prescribed percentage of the revenue earned by the telecom licensees to be decided in consultation with the Telecom Regulatory Authority of India (TRAI).

• Further, it envisaged the implementation of USO for rural and remote areas would be undertaken by all fixed service providers who shall be reimbursed from the USOF. 

• Other service providers would also be encouraged to participate in USO provision subject to technical feasibility and would be reimbursed from the USOF.

• The Universal Service Support Policy came into effect from April 1, 2002.

• The Indian Telegraph (Amendment) Act, 2003 giving statutory status to the Universal Service Obligation Fund (USOF) was passed by both Houses of Parliament in December 2003.

• As per the Indian Telegraph Act, 1885 (as amended in 2003, 2006), the Fund is to be utilised exclusively for meeting the Universal Service Obligation.

Major projects funded from USOF

1) BharatNet: It is one of the biggest rural broadband projects of the world, is being implemented in a phased manner to provide connectivity at all Gram Panchayats (approximately 250,000) with broadband in the country. Phase-I was completed in December 2017 with the implementation of over 1 lakh GPs, and the remaining Gram Panchayats are being connected under BharatNet Phase-II. 

2) Comprehensive Telecom Development Plan (CTDP) for the North-Eastern Region: On September 10, 2014, the Union Cabinet approved a proposal to implement a Comprehensive Telecom Development Plan for the North-Eastern Region. The Project envisaged to provide 2G mobile coverage to 8,621 identified uncovered villages, installation of 321 mobile tower sites along National Highways and strengthening of transmission network in the States of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim and Tripura. 

3) Implementation of Comprehensive Telecom Development Plan for Islands:

• Submarine Optical Fibre Cable Connectivity between Chennai and Port Blair and other Andaman & Nicobar Islands.

• Provision of Submarine Optical Fibre Cable Connectivity between Kochi and Lakshadweep Islands.

4) Mobile Service in Uncovered Villages: The government has prioritised to reach remote areas of the country such as Northeast States, Islands, Himalayan States, Western Border States and more importantly the Left Wing Extremism affected areas in the first phase.

5) Aspirational Districts Scheme: A scheme for 502 uncovered villages of Aspirational Districts over four states (Uttar Pradesh, Bihar, Madhya Pradesh and Rajasthan) for provisioning of 4G based mobile services has been finalised.

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