David Townsend explains the nin stages of development for Universal Service/Access Funds in developing countries.

1. Stages of USAF Development and Operations David N. Townsend USAID/GBi Program on Universal Service and Access Fund Development CTO Connecting Rural Communities Africa Forum 2011 August 26, 2011 Dar Es Salaam

2. Stages of USAF Development and Operations Enabling Legislation Institutional Framework Collections and Accounting Market Assessment, Gap Analysis Strategic Plan Organizational and Business Plan Operating Procedures and Plans Project Design, Award, Implementation 2 Monitoring and Evaluation

4. Key provisions should include:

5. Formal establishment and authorization of the Fund

6. Definition of Fund contribution obligations (not necessarily exact amounts, which may be determined by later rulings)

7. General objectives, targets, priorities for Fund support

8. Institutional framework, authorization, governance

9. Implementation steps, milestones, time framesEnabling Legislation 3

11. Key features include:

12. Organizational setting (e.g., within Regulator, Ministry, or separate institution)

13. Source and amounts of administrative budget (distinct from Fund Project budget)

14. Assignment of top management (e.g., Director General), as well as governance structure (Board of Directors)

15. Authorization for hiring staff, commencing operationsEnabling Legislation Institutional Framework 4

17. Collections procedures include:

18. Defining precise amount, formula for required contributions

19. Timing and method of contributions

21. Transparent accounting of all income, expenditures, including public (on-line) access to information

22. Independent audits of accountsInstitutional Framework Collections and Accounting 5

24. Identify scope of current service access, usage

25. Obtain data from operators on coverage, plans, costs, etc.

26. A Gap Analysis can help determine costs, priorities

27. Distinction between Market and Access gap

28. Estimates Fund support requirements for different locations, services• Fund should maintain a comprehensive Database of market conditions, regularly updated. Institutional Framework Market Assessment, Gap Analysis 6

30. Identifies broad Programs for Fund support, and anticipated Projects to be undertaken within each:

31. Programs focus on a category of objectives, e.g., voice telephone coverage, public telecenters, ICT in schools.

32. Projects are individual initiatives within a Program, targeting specific geographic areas, for example.

33. Most Programs will consist of multiple Projects over several years to achieve universal goals.• Budget Forecasts: Plan estimates expected Fund resources and allocates budget acrossprospective programs and projects. Strategic Plan 7

35. Organizational Plan defines the structure and scope of the Fund administration:

36. Organizational chart, lines of authority

37. Personnel positions, job descriptions

39. Equipment, technical, logistical resources

40. Outside support, contractingStrategic Plan Organizational and Business Plan 8

42. Operating Procedures include:

43. Data collection, market analysis

44. Strategic and operational planning, including criteria and methods for choosing priority projects

45. Project design, award, and implementation

46. Requirements for public consultation, transparency, competitive fairness, etc.Strategic Plan Operating Procedures and Plans 9

48. Parameters of projects to be undertaken (scope, locations, budgets, time frames)

49. Quantifiable targets to be achieved

50. Staff assignments

51. Review and reconciliation of budgets, ongoing projects, in context of Strategic PlanStrategic Plan Operating Procedures and Plans 10

53. Project Design determines the precise scope, targets, and mandatory specifications of a project.

54. Should be developed in consultation with both community and industry stakeholders

55. Requires needs assessment, local market analysis, and business case

58. Selected contractor must be capable of implementing required services according to schedule

59. USAF project team works with contractor to ensure timely and adequate deployment, resolve uncertainties

60. Disbursements over time, based upon achieving verifiable milestonesProject Design, Award, Implementation 12

62. Monitoring of project implementation to verify compliance

63. On-site inspections, plus surveys of local users

64. Subsidy payments tied to verified service delivery

66. Socio-economic impacts, user responses

67. Fund Annual ReportProject Design, Award, Implementation Monitoring and Evaluation 13