Like universal access and service (UAS) itself, a national backbone, whether it extends and connects existing networks or is a separate new network, may need to be a candidate for non-commercial funding. This funding may be through a variety of financing mechanisms (Government funding, Universal Access and Service Fund (UASF), public-private partnership (PPP), etc.). The options for funding backbone initiatives are similar to those for funding UAS in general. They include the following:
- Part of obligations in UAS licences or other regulatory instruments. Network operators obliged by winning UAS tenders to provide UAS into new areas must extend their backbones to reach certain areas.
As noted in Section 3.4.6, this is illustrated in several recent UAS subsidy competitions, where the bidders were required to provide sufficient bandwidth capacity and access to radio towers on any new backbone link financed through the subsidy, and to guarantee non-discriminatory open access (on commercial terms) [1]. A Reference document providing a typical Request for Proposal (RFP) and technical specification for this requirement is provided in Chapter 8 Competing for subsidies.
Depending on the case, these may be minor branch links or quite significant sections of transmission route; or even include core network enhancements. The Nigerian Universal Service Provision Fund is a case where several transmission links of up to 200 km in length, together with customer services – Internet POPs and local access for voice services – are being financed competitively by UAS subsidies. - Allocations from public funds. Network operators could request and receive funds to make their backbones reach certain areas. When more than one network operator competes for funds for the same area, objective methods (auctions) or subjective methods (“beauty contests”) can be used to decide between them. Public funds might not be earmarked only for telecommunications, e.g., universities and other technical institutions may have operating functions and applications that require substantial data traffic and might seek funds from agencies that are specifically concerned with education or even just with National Research and Education Networks (NRENs). These funds are not usually intended for creating physical infrastructure though they might be suitable for buying capacity on existing networks.
The Reference Document More Bandwidth at Lower Cost provides recommendations on how universities can work together to obtain more capacity at lower costs, through demand aggregation and other planning actions, which create economies of scale indirectly affecting the cost of UAS.
End Notes
- Examples of such open access requirements are in the UA subsidy competitions of Nigeria, Mozambique and Mongolia.