Amendment to widen scope: Digital Bharat to get push with change in Telegraph Act

The government is likely to amend the Indian Telegraph Act so that the Universal Service Obligation Fund (USOF) can be used for research and development purposes too. The amendment will be required as the Budget for the next fiscal has proposed allocation of 5% of annual collections under the USOF for the purpose of R&D to enable affordable broadband and mobile services in rural and remote areas.

As currently there is no provision to allocate funds for R&D purposes in the Act, an amendment would be required, officials said.

The government had earlier amended the Telegraph Act in 2006 to widen the scope of the USOF.

The USOF was established in 2002 under the Indian Telegraph (Amendment) Act, 2003, with the fundamental objective of providing access to ‘basic’ (landline) telecom services to people in the rural and remote areas at affordable and reasonable prices. Subsequently, the Indian Telegraph Act was amended in 2006 to repeal the term ‘basic’ and widen the scope to provide subsidy support for enabling access to all types of telecom services, including mobile services, broadband connectivity and creation of infrastructure like optical fiber cable (OFC) in rural and remote areas.

The resources for implementation of USO are raised by way of collecting a universal service levy (USL), which is 5% of the adjusted gross revenue (AGR) of telecom operators. It is a non-lapsable fund and the levy amount is credited to the consolidated fund of India. Every year, funds are made available to USOF after due appropriation by the Parliament.

The USOF generally gets around Rs 9,000 crore annually from operators as USO levy. At 5%, the R&D component will come to Rs 450-500 crore. The department of telecommunications (DoT) has formed a committee to suggest guidelines for release of R&D funds from USOF.

The government feels that development of intellectual property (IP) locally is critical for the communications, which is a strategic factor. That is the reason why so much focus is on research & development because the aim is to create indigenous technology for telecom.

The R&D initiative as announced in the Budget will support local companies to develop products, which will be utilised to proliferate broadband and mobile services in rural and remote areas.