The proposed use of the Universal Service and Access Fund (USAF), to subsidise the cost of set-top boxes for the poorest households, is going to be another good-sounding idea that will be in danger of coming to nothing.
Communications minister Ivy Matsepe-Casaburri made the statement twice in as many press conferences; she also wants the contributions to the USAF to be increased and says there is about R800 million in the fund.
Her latest statement, while true, is not all it seems to be. This is in keeping with the confusion her pronouncements usually cause, such as the muddle over the school e-rate, the lack of appointments of cyber inspectors, the legal wrangling over the issue of whether VANS can self-provide, and so on.
Just how much money is in the USAF? The Independent Communications Authority of SA (ICASA), which is mandated to collect the contributions from the telecommunications operators, says to date a total of R841 million has been collected over its nine years of existence.
However, according to the parliamentary presentation of the body that is responsible for spending the USAF, the Universal Services and Access Agency of SA (USAASA), R257.034 million has been doled out since 2001. This means there should only be R583.996 million available.
Is there a USAF?
Contrary to general perceptions, USAASA has had some access to the USAF. In the last fiscal year, it funded school connectivity to the tune of R30 million. It spent another R11 million on community access centre connectivity, and USAL subsidies came in at R11.6 million.
So where did the R800 million number come from? I suspect it originated from USAASA~Os parliamentary presentation, when the value was actually suggested by a member of Parliament, and USAASA CEO James Theledi just concurred.
The reason USAASA doesn~Ot necessarily know the actual value of the fund is because ICASA collects, National Treasury holds and the Department of Communications (DOC) tries to make policy, but not necessarily sense. This means the bureaucracy is not communicating with itself.
Which brings me to the next question. Is there actually a USAF? Is there a bank account of some sort, or is all this cash crammed under somebody~Os mattress waiting to be used?
Theledi said during a parliamentary briefing that it was his understanding that National Treasury had ring-fenced the USAF, meaning the money has been specifically earmarked for use.
However, I have been told this is not the case, but rather the money has been placed in the National Revenue Fund. This fund is, strictly speaking, a large pot from which disbursements are made according to the three-year Medium Term Expenditure Framework D the regulations that govern how public expenditure is allocated. So it means the money collected has been treated like an ordinary tax rather than a levy designated for a specific purpose.
Slow progress
Is there a bank account of some sort, or is all this cash crammed under somebody
Paul Vecchiatto, Cape Town correspondent, ITWeb
We all know how slowly the wheels of government expenditure approval move and the DOC~Os inability to grease these. Remember the ongoing saga of Sentech~Os funding? I would not be surprised if the final approval of the subsidy is granted long after the November 2011 switch-off date.
Is it really necessary to raise USAF contributions? The increase from 0.2% of profits to 1% may seem almost necessary, but the telcos say they already have a heavy tax burden. What is more, the Electronic Communications Act allows for widening the contribution base, meaning it won~Ot just be the traditional telcos paying, but also those who are currently considered to be VANS.
Finally, can the USAF be used for subsidising the cost of customer premise equipment, which is what set-top boxes really are? This seems open to some debate, but the fund~Os original objective was to subsidise infrastructure and to help disadvantaged people, such as the disabled, and those who live in rural areas.
Why so much negative reaction from industry and government circles? It is because they had no inkling of this idea before it was publicly announced and are growing weary of one good idea after another turning out to be a dud?
Interestingly, no one with whom I have spoken on this issue is against using the USAF to subsidise set-top boxes and the roll-out of digital TV. It is important that the country does this and there is a political imperative too.
I would not like to be the person who has to tell our restive population that they won~Ot be able to watch the 2010 Soccer World Cup.
Related story:
Telcos unhappy over digital billions
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