UNIVERSAL SERVICE OBLIGATION IN NIGERIA

TELECOMMUNICATIONS SECTOR.

Being a paper presented at the INTERNATIONAL CONFERENCE IN ELECTRONIC COMMERCE AND

TELECOMMUNICATIONS IN NIGERIA: maximizing the benefits of the digital economy.

On

Thursday, 26th September, 2002

Golden Gate Restaurant, Ikoyi, Lagos, Nigeria.

By

PETER CHUKWUMA OBUTTE

Research Fellow

Faculty of Law, University of Oslo, Norway.

UNIVERSAL SERVICE OBLIGATION IN NIGERIA TELECOMMUNICATIONS SECTOR

INTRODUCTION

So far, one consensus amongst the participants in this conference is that Nigeria's Information Technology is at infancy stage. However, when juxtaposed with trends in the relevant global market, our situation no doubt calls for a determined commitment and collective effort by all stakeholders to ensure a sustained progress towards being part of the Information Society thus guaranteeing the desired dividends of the IT era while fully maximizing the benefits of a digital and technology driven economy.

DEFINITION

Universal Service has been stated to mean "a defined minimum set of services of specified quality which is available to all users independent of their geographical location and in the light of specified national conditions, at an affordable price".

Apparently, this definition does not admit location, status or income as basis for excluding anyone from access to telecommunications services in areas so defined.

Member states of the European Union were obligated to ensure universal service in the provision of voice telephony via a fixed connection which allows a fax and a modem to operate as well as the provision of operator assistance, emergency, directory enquiry services and provision of public payphones.

RATIONALE FOR UNIVERSAL SERVICE

The entire effort under the universal service regime is channeled towards bringing about economic growth and ultimately, economic but sustainable development. Man has remained the central theme of this development. Development implies a better living standard or human welfare. The role of telecommunications as a vehicle to development led to the establishment of International Telecommunications Union under the defunct

League of Nations.

The truism of this assertion is discernable from the relevance and survival of ITU uptil this day making it the oldest body under the succeeding United Nations.

Realizing that social and economic intercourse among nations facilitate development, the ITU had consistently transmitted and translated its objectives through policy communications to state parties and most importantly, through agencies such as World Trade Organization.

The WTO recommendations, guidelines and annexes aptly constitute a point of reference in this regard.

ELIGIBILITY FOR UNIVERSAL SERVICE STATUS

Basically, the universal service principle presupposes the provision of telecommunications services to all users. Everyone is contemplated in this regard- However, startling innovations and rapid technological evolution in the telecommunications sector leading to unanticipated costs have made it to be only a telecommunications policy concept which keeps being redefined though without losing its antecedent or essence in the sector.

Of course, the attendant politics and complexities associated with the obligation of universal service occupy a prime position in its continual re-definition and review.

In the light of these competing variables, the European Commission had noted in 1995 under its Theme paper in universal service issues that: -

"Universal service can be promoted simply by ensuring that the defined services are at a price which allows the provider to cover its cost" without hesitating to add that "if services are genuinely to be universally available, all customers must be able to afford both the cost of connecting to the network and the cost of using the services". In that regard, affordability was not expected to mean setting general prices at a level which is affordable to those on the lowest incomes, rather, it could result from combining price levels which are affordable to a majority of subscribers with specific targeted schemes to assist low income users or those with particular needs.

CALCULATNG COST

The cost of providing universal service has remained the bane of its true realization.

Against the government mandate to ensure that market players share fully in this obligation, these incumbents and significant market power holders (SMP) have consistently explored means to fully realize commensurate return on their infrastructural investment being a foremost business priority.

These two highly irreconcilable factors therefore leave cost calculation schemes and mechanisms very unstable. The interplay of these factors however makes government policy interventions ever relevant if the developmental goals and benefits are to be realized

FINANCING UNIVERSAL SERVICE

It necessary follows that the financing of universal service is a twin pillar of cost as the bane of its full realization.

In this connection, modalities and mechanisms towards cushioning the practical financial burden of universal service provision is continually appreciated.

Effective cost sharing and financing mechanisms to ensure universal services have been suggested especially relating to specific local conditions.

Established market systems like the European Union had severally considered options such as financing through the universal service fund where an account is designated for that purpose or alternatively the application of direct support from budgetary allocations by way of state aids.

While the former anticipates contribution from all market players including the government, the latter requires greater participation by government to aid particular operators, or directly to certain customers so as to cover cost of special equipment or tariff packages for users with disabilities.

In the European Union, countries such as France and Italy have already established a universal service fund for this purpose.

THE WAY FORWARD

In conclusion, it is not in doubt that the rapid innovations which have witnessed this technological era translates into greater challenges to nations across the globe without any consideration to their level of development, and as such while developed nations have continually responded to these challenges with determined vigour, it is only imperative that Nigeria should courageously device practical but ingenious schemes and mechanism to adequately respond to these challenges which will enable it tag along and as a matter of reasonableness eschew the atavistic proclivity towards rhetoric and prevarications which usually attend pragmatic means of improving the well being of individuals.

Telecommunications is a pivot on which development rotates.

In this regard, durable regulatory framework, sector specific regulations, policies and laws are inevitable.

Realization of a sustainable universal service is possible.

A Universal Service Fund transparently and independently administered is advocated.

The challenges of the moment are real, but the benefits are unimaginable.

PETER CHUKWUMA OBUTTE

Research Fellow

Faculty of Law

University of Oslo,

Norway.

designed & built by: Henry Nwachukwu

e-mail: henrynwachukwu1@yahoo.com