KC(A) Act 2008: The Universal Service Fund

USFThe Universal Service Fund (USF) was established by the recently passed Kenya Communications Amendment Act 2008 and, while promising in theory, it seems to be rather thin on the details of its implementation.

Where a lack of clarity on the issues exists, the Law could be prone to misrepresentation and abuse.

What can be gleaned from the Act?

  1. It is funded from licensee levies, allocation by Parliament, principal and interest payments on loans advanced, investments by the Fund and endowments.
  2. It is managed by the Communications Commission of Kenya (CCK)
  3. One can apply for a loan from the Fund
  4. There is a catch-all clause granting the relevant Minister power to make regulation on all other matters not explicitly prescribed:usfminst

What are the issues that need to be addressed?

  1. We need to know what specific programs the Fund will support.
    The sum total of the purpose of the Fund is carried in this one sentence:USFClear as mud. Nowhere else in the Sections 84J – P of the Act are these objectives, or the means to achieve them, expounded upon.
    Questions such as who will be able to access the fund and areas that stand to benefit – such as high cost, low-income areas, schools etc., need to be addressed.
  2. Are these loans or subsidies, or a combination of the two?
    It’s not quite clear whether the Fund is only a loan facility or whether it will offer subsidies to eligible residents, public institutions and service providers.
    That’s why it helps to have more specificity on its implementation.
  3. The contribution methodology of levies by licensees (service providers) needs to be explicitly stipulated.
    Service providers will probably have a certain contribution factor shaved off their earnings to fund these ICT initiatives; but the process for determining the percentage and how often it changes (if it follows mark-to-market) should be transparent.
    This determination should not be solely vested in the Minister of Information.