USAF Program Concepts by Integra LLC

GLOBAL BROADBAND AND INNOVATIONS PROGRAM USAF CAPACITY BUILDING MODULE: PROGRAM CONCEPTS NOVEMBER 2012

November 2012 This publication was produced for review by the United States Agency for International Development. It was prepared by Integra Government Services International, LLC.

GLOBAL BROADBAND AND INNOVATIONS PROGRAM USAF CAPACITY BUILDING MODULE: USAF PROGRAM CONCEPTS NOVEMBER 2012

DISCLAIMER The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

CONTENTS Introduction Program 1: National Backbone Network Expansion Overview Program Outputs Business Models Program 2: Community Broadband ICT Access Overview Program Outputs A. B. C. D.

Broadband Network Access Community ICT Centers Institutional Connectivity Public Broadband Communication Services

Business Models Program 3: Community ICT Center Operations Overview Program Outputs Business Models Program 4: Universal Basic Mobile Telephone Service Overview Program Outputs Business Models Program 5: ICT Content And Applications Development Overview Program Outputs Business Models Program 6: Affordable ICT Devices Overview Program Outputs Business Models

USAF Program Concepts

2 4 4 4 5 6 6 6 7 7 8 9 9 12 12 12 13 15 15 15 16 17 17 17 18 20 20 20 21

Global Broadband and Innovations Program

Introduction This is Capacity Building Module #2 of the USAID/GBI program to support enhancement of Universal Service and Access Funds (USAFs) as a resource to promote ICT development. This module addresses USAF Program Concepts. Other modules in this series address the following topics: Module #1: USAF Strategic Planning Module #3: USAF Monitoring and Evaluation Module #4: USAF Data Collection and Market Analysis Collectively, these modules offer a set of useful information resources and practical tools, based upon international experience and best practices, in the management of Universal Service and Access Funds. Combined with other capacity building resources, including direct technical assistance from GBI and others, these modules can help USAF administrations and staff to enhance Fund operations, and improve the effectiveness of ICT development financing on many levels.

Module Objectives, Contents This module provides a set of prototype concepts for the development of USAF operational programs. These have been defined based upon a wide range of experience, ideas, and inputs from active USAFs around the world, as well as research and analysis concerning the status of ICT development and USAF practices in many different developing economies. In keeping with the mission and ongoing work of GBI, these program concepts are designed to address typical gaps in national level access to basic and advanced ICTs, through a coordinated and comprehensive set of initiatives. While some Funds may have limited financial resources, and may not be able to undertake all of these programs together, they are structured to encourage integrated approaches that will yield maximum benefits in the areas where they are deployed. The program descriptions are presented in a structure that allows them to be adopted directly by a USAF as part of a Strategic Plan, or edited/modified in any manner consistent with the Fundâ&#x20AC;&#x2122;s mission. Other programs, addressing additional strategic objectives, can certainly be added as well. But the concepts proposed here seek to represent the most fundamental requirements and key priorities for a USAF and national stakeholders to follow in promoting universal ICT development goals. In summary, the recommended programs include the following:

NOVEMBER 2012

1. NATIONAL BACKBONE NETWORK EXPANSION: Expanding high capacity national backbone networks to reach remote and unconnected regions of the country. 2. COMMUNITY BROADBAND ICT ACCESS: Extending broadband connectivity directly into target unserved/underserved towns and villages. This program has four main elements, ideally to be implemented together in each locality: a. b. c. d.

Broadband Network Access Community ICT Centers (CICs) Institutional Connectivity Public Broadband Communication Services

3. COMMUNITY ICT CENTER OPERATIONS: The functions of managing CICs within each town, after they have been built and equipped. 4. UNIVERSAL BASIC TELEPHONE SERVICE: Extending coverage of basic telephone networks to reach the most remote unserved locations. 5. ICT CONTENT AND APPLICATIONS DEVELOPMENT: Support for development of locally relevant and valuable content and applications to stimulate demand and enhance the benefits of ICT services. 6. AFFORDABLE ICT DEVICES: Support to reduce costs of computers, smart phones, tablets, and other end-user devices to help make them more affordable to lower-income users. For each program, the sections below provide an Overview discussion, a description of the expected Outputs to be achieved by the program, and a summary of potential Business Models that can be employed to implement the program.

USAF Program Concepts

Global Broadband and Innovations Program

Program 1: National Backbone Network Expansion Overview This program will support the establishment and expansion of national high-capacity backbone network infrastructure throughout the country. The objective is to expand backbone network connectivity to all regions of the country, creating at least one network node in each province (if provinces are small), or district or sub-district. These backbone network extensions are anticipated to consist primarily of fiber optic transmission systems, and should deliver two-way data transport capacity sufficient to allow sub-district-wide institutional and retail broadband services in each location, commensurate with near-term and expected future demand. The backbone network extension(s) will be privately owned and operated, and/or will function as a public-private partnership. It will provide wholesale transmission capacity on a nondiscriminatory basis to all interconnecting local access networks and service providers. The ownership and operating structure of the backbone components will be determined through a consultation and negotiation process, followed by competitive bidding, among interested, qualified stakeholders. The mandatory outcome of the program will be broadband connectivity available to as many locations as possible, and a sustainable, commercially viable network model.

Program Outputs The specific configuration, technologies, capacity, and service arrangements arising from this program will be determined during the development of project terms and conditions, and may involve several regional sub-networks, which may vary in some aspects. Overall, the activities and outputs of the program should conform to the following expectations: Ø Construct and install wholesale high-capacity transmission network links, connecting identified rural/underserved locations to an existing national backbone transmission network node. Ø Project procurements will identify specific minimum requirements by region: locations to be connected and network capacity to be provided at each. Ø The contracting network operator will operate and maintain all network links and ensure continuous service to all locations, with adequate provisions for redundancy, service quality, fault repair, and security. Ø In order to prevent creation of local monopolies with USAF funds, all such network operators will have to share a part of their infrastructure with competitors (at cost).

NOVEMBER 2012

Ø Network nodes will allow for connection of local distribution and access networks and services throughout the identified areas, with sufficient transmission capacity to support near-term and forecast future demand, including anticipated peak broadband traffic loads (to be specified). Ø Interconnection will be provided between the backbone extension network links and existing (or new) wholesale transmission networks, allowing direct connectivity to all public telecommunications network operators, leading also to international gateways.

Business Models The backbone extension projects will be developed through a participatory consultation process with existing network infrastructure providers, other potential infrastructure investors, and interested stakeholders, under the guidance of the USAF in collaboration with other Government participants, including the Ministry of Communications. This process will seek to identify the most appropriate, cost-effective, and efficient arrangements under which the proposed new network components can be built and operated. The likely options that will be considered under this consultative process will include, for example: Ø NATIONAL OPERATOR CONTRACT: Network construction, ownership, and operation by an existing national network operator, selected via a competitive bidding process, to be subsidized by the Fund. In this case, the operator would be required to provide wholesale connections to all other interconnecting operators, plus voice/broadband service providers, on non-discriminatory terms. Infrastructure sharing may be made obligatory in order to promote and derive benefits of competition. Ø CONTRACTS WITH MULTIPLE OPERATORS: Essentially the same as above, but different regions of the country may be auctioned separately and there may be different operators for different regions. Ø CONSORTIUM: A consortium of existing operators (and possibly other participating companies/investors), with joint ownership and control of the network, potentially including a division of available capacity according to each operator’s share. Ø PUBLIC-PRIVATE PARTNERSHIP: A PPP in which the Government may own a portion of the network together with one or more operators (selected through competitive bidding), subject to specific terms and conditions for sale/leasing of capacity, competitive relationships, and potential privatization of the Government’s share. Ø BUILD-TRANSFER-OPERATE: Separate entities might be responsible for construction and subsequent ownership and operation of the network, under a Build-TransferOperate (BTO) type of plan, whereby initial construction is subsidized by the Fund, while ownership and operation is implemented under a separate contract through competitive bidding or another process.

USAF Program Concepts

Global Broadband and Innovations Program

Program 2: Community Broadband ICT Access Overview The purpose of this program is to provide full-service broadband connectivity, services, and facilities to designated unserved and underserved communities, delivering broadband access that is available to all potential users within each local service area. To achieve these results, the Community Broadband ICT Access program is divided into four sub-components, all of which will be implemented together in each target location: A. BROADBAND NETWORK ACCESS: Extending network links into areas unserved by high capacity signals, to allow for community-wide broadband access. B. COMMUNITY ICT CENTERS (CICS): Establishment of public access CICs within each designated community, connected to the broadband network, making Internet access, computers, ICT services, and training available to all local citizens. C. INSTITUTIONAL CONNECTIVITY: Providing broadband connections directly to identified local public institutions, including schools, health facilities, local government offices, and community centers. D. PUBLIC BROADBAND COMMUNICATION SERVICES: Establishing publicly available retail broadband communication services within each community, both fixed/wireline and wireless, for purchase and use by local citizens, enterprises, and other customers. This combination of infrastructure development and service delivery will ensure that all communities obtaining USAF assistance will ultimately receive the benefits of full broadband ICT access, equivalent to that which is available in urban and higher income areas. The program aims to establish these services on a commercially sustainable basis, by encouraging cost-sharing, revenue and demand stimulation, and public-private partnership arrangements.

Program Outputs To achieve the multiple, inter-related goals of this program, projects will be designed to require implementing contractors/operators to provide the full range of specified outputs simultaneously within each defined service area. The scope of these program outputs may differ in details for each project and location as appropriate, but in general they should consist of the following:

NOVEMBER 2012

A. Broadband Network Access The purpose of this component is to extend “wholesale” broadband network access and coverage directly into each of the communities designated by each project’s geographic area. This may require establishment of a broadband point of presence or network node within each local area, linking to the national backbone network infrastructure. General parameters of this requirement include: Ø Each local access point should deliver sufficient two-way data transmission capacity to allow widespread connection of broadband quality services throughout the community. [Detailed generic technical specifications will be developed as part of project TORs.] Ø In particular, the Broadband Network Access connections must be capable of direct connectivity and adequate service delivery to each of the community and institutional access locations described in Parts B and C below, while also enabling connection of public broadband services in general throughout the local service area, as required under Part D. Ø The local broadband access connection requirement will be technology-neutral, and maybe implemented via any authorized architecture, wireline or wireless, through a single integrated network or via multiple networks to different designated locations within a project, so long as the resulting capacity and access are verifiably achieved. Ø The local access network may also be required to incorporate an electrical power source of sufficient energy to support continuous operation, as well as adequate backup energy supply. This power source should utilize "clean energy" technology wherever possible. Where appropriate, the project specifications may also require extending the scope and capacity of such power source to help support the electricity needs of the community in general, particularly for ICT access locations.

B. Community ICT Centers This component involves establishment of public access Community ICT Centers (CICs) within each designated community covered by projects implemented under this program. These CICs will provide access to broadband Internet connectivity, computers and other related equipment, technical training and support, public capacity and awareness building, and other services and resources enabled by broadband access. Note: While the CICs will be built and connected to the broadband network under this program, their ongoing operations will be implemented under the separate CIC Operations program (see Program 3 below). Key features of this component include:

USAF Program Concepts

Global Broadband and Innovations Program Ø Each CIC will have a minimum required configuration of available technology, including computers, broadband network connections, servers and routers, software platforms and applications, and related equipment and capabilities, specified in detail for each mandatory service location with each project's TORs. Ø The size and scope of CIC installations may vary by the locations in which they are established, according to population, demographics, geography, or other factors. In each case, however, the facility must be adequate to allow robust access to broadband ICTs for the local community. Ø The location and housing for the CIC must be decided on a location-specific basis by the contractor and local officials, ensuring a publicly accessible and secure facility; project financing will cover the costs of building and/or renovating the appropriate space, as needed. Ø The broadband connections to the CICs will be linked to the network access point established within each community, and in many cases will likely be co-located with this access point (e.g., fiber termination or other network node). The capacity of the connection of the CIC must be separate to allow for simultaneous peak use of all stations of the CIC and for outside connections at the same time.

C. Institutional Connectivity Under this component, the implementing contractor will be required to install broadband access connections at specified institutional locations within each target community. The required locations will be identified during each project’s planning phase, and will typically include, at a minimum: • • • •

EDUCATIONAL: All local public schools, and any local university campuses or extensions. GOVERNMENT: Local administration buildings and any national/regional government offices, including post offices and libraries, and security agencies. HEALTH: Clinics, hospitals, doctors’ offices, other local medical facilities. COMMUNITY SERVICE: NGOs and other public service and community locations, potentially including religious facilities.

Connections to each institution must provide adequate bandwidth to allow for the minimum level of projected network usage in each location, as specified in project terms. The implementing contractor will be responsible for determining the most appropriate access technology (wired or wireless). The contractor will also support local officials in the procurement and installation of internal facilities, equipment, and software at each location (e.g., local area network, server, firewall, etc.), as well as required end-user devices (which may be supplied under a separate program). The contractor will then also be responsible for providing ongoing service delivery to all institutions, according to an agreed framework for pricing, terms, and conditions (to be negotiated as part of project planning and implementation). As a general principle, service

NOVEMBER 2012

prices should not be higher than prevailing prices being charged for equivalent service in the current urban markets.

D. Public Broadband Communication Services This component will require the implementing contractor, either directly or through an affiliated or subcontracted operator, to provide public broadband communication services to each target community covered under this program. Such service should be available throughout the community, to allow connection of households, businesses, and other locations to broadband quality transmissions. Implementation of these public broadband services may be accomplished over time, according to an agreed rollout plan and appropriate sustainable business parameters, but there should be milestones for significant and steady progress in retail consumer broadband access in all target communities. Partial subsidies may be paid out on achievement of the milestones, to help the service providers. Key features of this component of the program include the following: Ø The required broadband services may be delivered over any technology platform or architecture (wireline or wireless, fixed or mobile), as long as they offer the minimum service quality and capacity specified for each project location. All mandatory regulatory standards and service features must be available to all end users, including all functions necessary to ensure full utilization of Broadband Internet services and applications. Ø Services to the general public (businesses / households) may be provided over the same local network as that delivering service to mandatory public institutions, however the bandwidth for the institutions should be clearly separate. Ø The public broadband services will be provided on a commercial basis, at prices to be determined by the market, potentially subject to negotiated or regulated limitations. Project TORs may specify mandatory minimum subscription targets for each location, which the implementing contractor must achieve over given time periods. The USAF subsidy for the project will take account of any below-cost discounts, incentives, or other valid expenses required to achieve the minimum subscriptions and maintain a viable business environment, while yielding long-term sustainable market growth.

Business Models This program will be implemented through multiple projects, each of which will combine target communities within defined geographic regions that can be most efficiently developed together. The regions will be designed and implemented to correspond with the installation of backbone network infrastructure (Program 1) to the same locations, and also in accordance with regional license boundaries, where applicable.

USAF Program Concepts

Global Broadband and Innovations Program

For each region, one prime contractor should be selected with full responsibility to implement all components of the program within all designated communities. The prime contractor itself, however, may consist of a consortium or partnership of several specialized suppliers. It is also expected that large portions of many projects may be subcontracted to local companies or other entities that can construct and/or operate facilities and services most efficiently. In all cases, however, the prime contractor will retain contractual responsibility to ensure that the required infrastructure, facilities, and services are delivered according to mandatory conditions, and for managing the relationships among itself and all other affiliated suppliers and service providers. Under these provisions, there are several options for the business relationships that might be established under this program. Some examples are provided below. These are not necessarily mutually exclusive, and may be combined in various ways: Ø NATIONAL OPERATOR EXTENSION: One or more established national telecom operators might bid to take on full responsibility for extending broadband access beyond their current territory. The designated operator(s) would be contractually obligated to build out the required infrastructure and provide mandatory services in all identified locations. Such an arrangement could be established through a competitive USAF bidding process. Ø MINI-TELCO (LOCAL ENTREPRENEUR): Under this model, the operation of local/rural telecom services under the Community Access program is undertaken by separate, locally-based enterprises within each community or rural region served through the program. Within each designated service area, a single integrated contractor/ operator is fully responsible for construction and ownership of the required network infrastructure and facilities, and for providing all ongoing services and operations to end users. These Mini-Telco's may be integrated or affiliated with the local CIC(s) in the same areas. They may be fully commercial enterprises, or they may be a form of local cooperative or public-private partnership with local governments. These local operators must interconnect with national networks on commercial terms. To implement this approach requires assurances that the new enterprise will be appropriately licensed, along with guarantees of continuing service provision. Ø FRANCHISE: This model is a variation on the Mini-Telco, in that service area is again served by an individual local operator. However, in this version these operators represent franchise affiliates of a larger company or association. Each local MiniTelco, possibly including the local CIC, thus implements service according to a relatively standardized model, and shares costs, revenues, marketing, training, and other functions with the franchisor organization, while retaining local ownership and control within each site. Similar licensing and service provision requirements would apply to this model as well, likely at the level of the franchisor. Ø BUILD-TRANSFER-OPERATE (BTO): The prime contractor (and subsidy recipient) here would be a construction firm, responsible for network and facility build-out, but which

NOVEMBER 2012

would not take on the role of operator. The contractor would have to enter into agreements subcontracts with local or national operators to deliver service to end users over the network connections resulting from construction. In a "pure" BTO arrangement, ownership of the assets would transfer directly to the new operator, under negotiated commercial terms. The USAF contract would have to take this anticipated transaction into account. Ø MANAGEMENT CONTRACT: Under this model, a prime contractor receives the USAF subsidy and serves as overall project manager and integrator, but does not directly provide the required infrastructure or services. This firm engages subcontractors with the necessary capabilities for each function, including network construction and service operation, and coordinates all roles, while serving as the only formal agent to deal directly with the Fund. Actual ownership of contracted facilities may be divided among multiple entities, according to negotiated arrangements. Ultimate responsibility for fulfilling the terms of the USAF contract lies with the management company, regardless of subcontract arrangements. Ø JOINT VENTURE OR CONSORTIUM: Under this option, two or more companies might join together to combine their specializations (e.g., investor, network construction, service operation, local marketing) in a new venture, which will hold the prime contract, while each partner takes responsibility for implementing its assigned components. One entity, however, fully incorporated and licensed, must still have direct contractual responsibility. For all business models, there will be a variety of key elements -- pricing, revenue sharing, asset ownership, delineation of service requirements, and more -- which will need to be defined during the consultation and planning processes that go into project design.

USAF Program Concepts

Global Broadband and Innovations Program

Program 3: Community ICT Center Operations Overview This program will support the establishment and ongoing operation of Community ICT Centers (CICs) in designated locations within the country, for provision of public access to ICT facilities, services, training, and support. Physical construction of and network connectivity for CICs will be incorporated within the Community ICT Access program, while this program will focus on the services and operations of these Centers. The two programs will be initially introduced and executed in coordination with each other in each target community, but the CIC Operations program will fully take over and continue overseeing CIC activities upon completion of the construction phase. The purpose of this separate, operations-oriented program for CICs is to ensure that the public services to be provided through these facilities are delivered by organizations that are most capable of managing such services, as opposed to firms whose primary focus may be technical network construction and operation (although these will continue to have a role in providing broadband service and technical help to the CICs). Management of the CICs should be concentrated preferably among local community personnel, with an emphasis on outreach, customer service, training, entrepreneurship, and sustainable business practices. The projects under this program will thus aim to establish effective business models for operation and maintenance of the CICs within target communities, following the construction phase.

Program Outputs The CIC Operations program is designed to establish sustainable and socially beneficial public access ICT services, consistent with the overall goals of the USAF. The specific required and expected outputs of this program are defined in terms of both technology deployment as well as the utilization and impacts of those technologies. Thus, the CIC Operations projects will typically be required to provide the following: Ø Management, operation, and maintenance of CICs, by designated staff engaged or arranged by the USAF contractor, with responsibilities for assisting customers, managing finances and accounts, maintaining hardware and software, and overseeing all other CIC operations. Ø Availability of a required set of basic CIC services, including public Internet access, computer use, voice/video calling, e-mail, access to e-Government and educational services and other applications and information sites, and more as specified in project TORs.

NOVEMBER 2012

Ø Comprehensive ICT training classes and resources, available to various categories of users, from individual citizens (young and old, male and female) unfamiliar with technology, to entrepreneurs and employees, offering appropriate knowledge sharing and capacity building, on an affordable basis. Ø Full ISP services for local users, customized to local demand; these should typically include Internet account subscription and management, web design assistance, e-commerce platforms and fulfillment, basic telemedicine facilities, applications and content development support, weblog and social media features, and other specialized Internet capabilities, expanding as demand merits. Ø Technical assistance and support for users (in coordination with the broadband network/service provider), both within the CIC and in the local community (for costbased fees), assisting with system use, equipment support, anti-virus and anti-spam software, trouble-shooting, and other basic ICT technical needs. Ø Other related and demanded services that can help make the CIC self-sustaining, while providing value to the community: printing, copying, scanning, digital photographs, mobile phone cards, mobile repairs/spares, even coffee and snacks, etc., as the CIC operator finds worthwhile for customers. Ø Marketing and customer/community awareness initiatives, to spread knowledge of the CIC's activities and benefits, reinforce the brand name, and encourage demand for ICTs in general within the community.

Business Models This program is intended to be implemented through a potential range of flexible and innovative approaches to the business and organizational structure for owning, operating, and overseeing CIC operations. Ideally, CICs will experiment with multiple models to produce sustainable and effective operations that can be emulated and enhanced throughout the country. Some of these business models for CICs may be integrated with the arrangements for local broadband access connections, described under Project 2 above. But there can also be stand-alone business models for CIC management only. For USAF procurement purposes, one contractor will typically be selected for each major region in which this program (and the related programs) will be implemented. It will be the responsibility of each contractor to ensure successful operation of the CICs according to the requirements of the project Terms of Reference, and these contractors will be the only entities to receive subsidies, and to have a contractual, binding relationship with the Fund. It may be stated that the subsidies will be for a limited period of time and it will be the contractor’s responsibility to make the CICs self-sustaining by the end of that time period. Other contributors must be organized and sub-contracted by the prime contractor for each region, including local entrepreneurs responsible for day-to-day management of each individual CIC, as well as any other partners or affiliates providing technical support and other services.

USAF Program Concepts

Global Broadband and Innovations Program There are several potential business models that can be followed to fulfill these requirements. Some of the most likely include the following: Ø CONTRACTOR OWNED AND MANAGED: The contractor may establish its own local ownership and operation model in certain locations. In these cases, the contractor would be directly responsible for all aspects of CIC service delivery and operation, personnel would be direct employees of the company, and it would transact business directly with local users. The USAF may subsidize provision of broadband service to the CIC for a certain period of time (say 3 years). Ø CONTRACTOR OWNED, SUBCONTRACTED MANAGEMENT: The contractor may opt to obtain ownership interest in the local CIC facilities, but to subcontract its management and operation to third party local entrepreneurs or other organizations, either individually or across several locations. Ø FRANCHISE OWNERSHIP AND MANAGEMENT: The contractor may establish a franchise system for the ownership and management of local CIC facilities, by awarding franchises to individuals or organizations in each community, requiring that each franchisee provide services according to the a common set of standards and conditions. The overall responsibility to fulfill obligations under the USAF contract will belong to the franchisor. Ø NON-AFFILIATED LOCAL ENTREPRENEUR OWNERSHIP AND MANAGEMENT: The CIC facility and services may be established on a non-affiliated basis independently by local entrepreneurs, which provide services autonomously, while purchasing network connectivity from the local network on a commercial basis (subsidized by the USAF for a certain time period). Where such independent relationships are established, and services are sufficient to meet the obligations of the contract, the CIC operations contractor is only obligated ensure that initial arrangements are adequate, to provide necessary training to the entrepreneur, and to make ongoing maintenance and support available. However, the contractor must monitor each community to ensure sufficient that service is available at all times. The specific business, administrative, and financial arrangements associated with any of the above options will be the responsibility of the contractor to determine, through negotiation with local entrepreneurs or other parties. The Fund will not have any formal relationship with any subcontractor, franchisee, or other affiliated enterprise. In all cases, the contractor must be responsible for ensuring effective delivery of end-user services in all communities, according to its contract terms. The contractor should also be responsible for providing adequate training and human resource support to local entrepreneurs and CIC managers, to ensure their ability to operate and deliver the services. Such training may include both technical training and support in the operation of the CIC equipment, and assistance in the management, marketing, charging, accounting, and other business aspects of operating a public Community Information Center.

NOVEMBER 2012

Program 4: Universal Basic Telephone Service Overview The purpose of this program is to extend the coverage of basic telephone services as far as possible into all areas of the country where access to such services is not adequately available, and where existing licensed operators have proven unwilling or unable to expand their networks, due to commercial or other constraints. The ultimate objective of this program is to achieve near-100% basic telephone service coverage throughout the country. (Note: In most cases, such service is likely to be delivered via some form of wireless cellular mobile technologies, but there may be instances where other platforms (satellite, fixed wireless, wireline, etc., may be required. The program is intended to be technology neutral in this regard.) Projects under this program will provide financial support for build-out of local telephone service coverage into unserved and underserved areas, to fill identified gaps and ensure signal access for all target communities. The projects will also support establishment of adequate electrical power supply for the required base stations, with a strong emphasis on utilizing the most economically efficient as well as environmentally friendly power solutions. The network and service technology configurations should also take advantage to the greatest extent of lower cost, rural-focused innovations to ensure affordable service for low income customers. Project implementation will also address other possible constraints to network development, such as rights of way and access fees, among other matters. Note: Locations receiving service under this program will not be the same as those to be served under Program 2; wherever feasible, Program 2 will be the preferred choice and will supersede this program; it is expected that most locations served under this program will also eventually be upgraded to full broadband status via Program 2.

Program Outputs In general, the outputs of this program essentially consist of standard basic telephone services and related features (as noted, these will most often be mobile telephone services). To deliver these services will require installation and operation of appropriate network facilities and infrastructure, although the precise configurations for each location and project will be technology-neutral, and determined on a case-by-case basis. In summary, the expected technical and service outputs resulting from this program should include: Ă&#x2DC;ď&#x192;&#x2DC; Establishment of Base Station (BTSs) or equivalent (e.g., small cell transmission sites, other network nodes) to cover each designated community, with adequate signal strength to allow phone usage throughout a defined service area.

USAF Program Concepts

Global Broadband and Innovations Program

Ø In case of non-availability of electrical power, or availability at a high cost, installation of adequate electrical power source to support full-time and backup operations; project TORs may require specific compliance with "clean energy" standards, and possibly extending such energy source for other uses, subject to necessary and available subsidy funds. Ø Telephone services must be established to meet all minimum quality of service requirements, must comply with national regulatory standards for service availability, reliability, maintenance, and other parameters. Ø Services available must include all standard basic telephone features: e.g., community-wide calling, connection to all national and international networks, emergency call numbers, etc., as specified in project TORs. Ø Tariffs for telephone services provided to rural, low-income communities under this program must not be higher than those charged in major markets for equivalent services. The project contract will incorporate pricing rules, in coordination with relevant tariff regulations. Ø In order to avoid creation of local monopolies with USAF funds, all such network operators will have to share a part of their infrastructure with competitors (at cost).

Business Models There are several different possible arrangements under which basic telephone services can be extended to unserved areas under this program. The project specifications should generally be neutral as to the specific business models, affiliations, or other relationships involved, as long as the required services are provided. However, some key options for the delivery of telephone coverage and service may include: Ø NATIONAL OPERATOR EXPANSION: One or more current national operators contract to expand their current networks and services into the designated areas, under the specified terms and conditions associated with the available subsidy. Ø NEW RURAL OPERATORS: New smaller regional or local wireless networks set up as a result of the USAF contract award, and receive license authorization to provide service to the designated areas, utilizing unused spectrum in each area, and deploying local networks to interconnect with national operations. These might be independent operators or new affiliates or subsidiaries of existing operators. Ø NEW NATIONAL LICENSE WITH RURAL MANDATE: One or more new national network operator/s might be licensed, to compete with existing providers, but with a specific priority mandate to cover identified unserved areas, in exchange for USAF subsidy. 16

NOVEMBER 2012

Program 5: ICT Content and Applications Development Overview This program focuses on demand-side stimulation of ICT markets, through support for the development of beneficial, valuable, and relevant electronic information content and applications, as a key input to the national ICT ecosystem. The main goal is to create and reinforce a robust enabling environment for software programmers, applications developers, information services, media organizations, and any public and private entities interested in sharing knowledge via electronic means. Projects under this program will typically be jointly developed together with candidate organizations and agencies, placing the focus of project design primarily with content and application developers themselves. There should ideally be a wide diversity of projects, in terms of size and scope, the type of products, target users, and institutional partners. In most cases, Fund projects in this area will aim to help launch new applications and content services, which should become self-sustaining over time. The subject matter of Fund sponsored content initiatives can be very broad, but should ultimately be of interest and relevance to the primary target user populations in rural and underserved areas of the country. [Note that this program should typically collaborate with and complement similar activities that may already be underway in other agencies, and in some cases those agencies may have exclusive responsibility for content and applications support, such that the Fund would not become involved.]

Program Outputs This program is intended to produce multiple outputs of varying nature and scope, all consisting of some form of end-use ICT applications and information content of value to the people of the country. These results can be achieved through a variety of projects supported by the Fund, in collaboration with different organizations (see below). Examples of the type of ICT content projects and outputs that this program should produce include: Ø Original and translated web sites and other materials presented in local, indigenous languages for the regions targeted by the Fund, highlighting information of greatest interest to populations who speak these languages. Ø Information content made specifically for and by local community users, sharing local knowledge, history, and culture, as well as business and government information, ideally developed by local users themselves.

USAF Program Concepts

Global Broadband and Innovations Program Ø Projects focused on graphic interface, audio-video, and other non-written content aimed at engaging and assisting non-literate users; similar applications and content for disabled or uneducated users. Ø Entrepreneurial ventures focusing on creating innovative applications for mobile and smart phones, tablets, and other new devices, providing useful capabilities for such users that may be unavailable on traditional PCs or laptops. Ø Government programs and public-private initiatives that focus on development of content for e-government services, including education, health, agriculture, and other public services.

Business Models The projects to promote applications and content development should be implemented by a variety of organizations, potentially including educational institutions, private enterprises, public agencies, non-profits, community groups, and individual citizens. Fund managers should seek to identify and assist qualified content developers in multiple sectors, through a combination of arrangements, appropriate to each case. Some priority models that may be pursued include: Ø COLLABORATION WITH UNIVERSITIES: The Fund may contribute ongoing or one-time financing for university programs that focus on ICT content development, with emphasis on student projects, experimentation, and applications of wide national interest. Ø COLLABORATION WITH GOVERNMENT AGENCIES: The Fund may establish mutual relationships with key Government Ministries and other departments, to support development of e-government applications, and/or specific focused content for key sectors, such as education, health, and agriculture. For some widely valuable applications, the Fund may help finance third-party developers to design and implement software to be deployed by many administrations, particularly local and rural government offices, to automate processes and enhance citizen access to information and services. Ø APPLICATIONS DEVELOPMENT INCUBATORS: The Fund may contribute start-up financing to small entrepreneurial incubators aimed at creating customized ICT applications businesses, specifically focused on the interests of local and rural users. Such support would seek to help launch viable private businesses in this sector that would grow on their own after Fund support. Ø COMMUNITY AND USER-BASED INITIATIVES: A variety of content development initiatives can be focused on encouraging local communities and users to create their own content, to share with friends, neighbors, colleagues, and wider audiences. Through the CIC programs, the Fund can support projects to help train and assist local users to build web sites, blogs, audio-visual materials, and other content that

NOVEMBER 2012

illustrates community interests and shares cultural knowledge based on users' experiences and ideas. Such projects can also help promote unique products that the particular community is good at and could market through e-commerce services. Ă&#x2DC;ď&#x192;&#x2DC; COLLABORATION WITH NGOS: The Fund may also work with non-profits and NGOs to help support development of on-line content, mobile apps, and other software or services that will help promote social and economic development.

USAF Program Concepts

Global Broadband and Innovations Program

Program 6: Affordable ICT Devices Overview This program will complement other Fund programs and projects by subsidizing the supply of end-user ICT devices, as necessary to help make access to and use of services more affordable, and to support demand stimulation, customer awareness, and technical training objectives. The scope of devices that may be supported through this program could include personal computers and laptops, servers and routers, smart phones, tablets, networking equipment, and other ancillary and support devices. Beneficiaries are likely to include public institutions (schools, health facilities, etc.), Community Information Centers, small business enterprises, as well as households and individual users. The program will be organized to provide one-time demand-side support to reduce the effective price of such hardware, according to analysis of market conditions, user needs, and costs of supply. A main goal will be for the Fund to negotiate bulk discount prices on behalf of beneficiaries, with willing suppliers, and then to augment such discounts with Fund subsidies. Measures will be established to ensure that only qualified users receive the subsidized devices, and to prevent unauthorized resale. This program should be implemented in close coordination with other programs, so that needed devices are available as services and facilities come online in target communities. (Alternatively, devices could be incorporated among the deliverables of other programs.)

Program Outputs This program will generally be developed “organically,” as needs and opportunities for costeffective device subsidy projects are identified, likely in coordination with other projects. The Fund will typically work with beneficiary organizations to define the scope of device-related projects. In some cases, these may involve multiple organizations combining their device procurement needs through the Fund, to obtain maximum scale discounts and bulk purchases. Among the key outputs and overall features of this program are the following: Ø The Fund will collaborate closely with both suppliers and potential users of ICT devices, to develop prospective procurement and financing options to deliver needed devices at affordable, below-market costs. The Fund's role will be chiefly as a source of co-financing and subsidies, while beneficiary organizations will determine the nature, quality, and quantity of devices required. Ø The Fund will generally only provide a portion of the cost of agreed device purchases for a beneficiary organization, and only to the extent Fund financing will demonstrably lead to benefits for the Fund's target users and overall objectives.

NOVEMBER 2012

Ø All projects involving Fund-supported procurement and distribution of devices to be made available to private, individual end-users (e.g., students, enterprises, households) will incorporate specific safeguards to ensure that only qualified users receive the discounted devices. Ø The Fund will work with beneficiary organizations to define the qualifying criteria required for users to receive discounted devices. These criteria may include enrollment in (and passing) relevant training classes, membership in the organization, income or other needs-based metrics. Some specific devices may be targeted to specific types of users, such as farmers or fishermen, who must also demonstrate qualification. Ø All ICT devices delivered under this program must be new, current technology, and include all typical components and features. They must be accompanied by standard manufacturers' warranties, and suppliers must provide appropriate technical and training support, and customer service to the same degree as are provided for fully commercial sales.

Business Models Support by the Fund for subsidies and discounts on end-user devices will be provided in connection with other beneficiary organizations or suppliers, and/or as a direct input to other Fund projects. These arrangements can take a variety of forms, separately or in combination. Some key examples include the following: Ø COLLABORATION WITH GOVERNMENT AGENCIES: The Fund may work with relevant government offices that are introducing or expanding use of ICTs, especially for citizens in rural areas, to help finance the supply of PCs and other devices needed for such projects. Examples may include devices for students and teachers, for health workers, or for local government offices and employees. Ø DISTRIBUTION THROUGH CICS: The Fund may coordinate distribution of discounted devices through Community Information Centers, which may develop programs and criteria for selling low-price computers, tablets, or smart phones to qualified recipients. For example, users who successfully complete a training course, or those who put in some number of volunteer hours, may be entitled to purchase a discounted device. The Fund may set general rules and parameters, and provide devices under special agreement to CICs, which the Center managers may implement the program and oversee distribution and sales. Ø COLLABORATION WITH OPERATORS: The Fund may also work with telecom operators to underwrite costs for certain smart phones, tablets, laptops etc., for qualified low income or special needs customers.

USAF Program Concepts

Global Broadband and Innovations Program Ă&#x2DC;ď&#x192;&#x2DC; COLLABORATION WITH TECHNOLOGY COMPANIES: Alternatively, the Fund may negotiate directly with technology companies that manufacture or sell ICT devices in the country, to arrange bulk discounted purchases or other business deals. Such agreements could lead to Fund purchases of various devices on an independent basis, to be distributed among Fund-supported projects as required. This type of arrangement should only be followed where substantial cost savings can result from Fund sponsored procurements. In all cases, the negotiations must be fully open and transparent.

NOVEMBER 2012