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In conversation with Nathalia Foditsch on Universal Service and Access Funds in LAC

Universal Service and Access Funds (USAFs) have been used by governments in Latin American and Caribbean (LAC) countries since the 1980s to address telecommunication related gaps. Senior Policy and Regulatory Specialist Nathalia Foditsch shares her insights on USAFs from A4AI latest report Universal Service and Access Funds in Latin America and the Caribbean written in partnership with ISOC. Read the full report in English and Spanish.

Tell me about how this report fits into the work of A4AI and the Internet Socitey?

Universal Service and Access Funds (USAFs) have amassed billions of dollars in Latin America and the Caribbean (LAC) since the 1980s, making them an important resource in achieving universal connectivity. However, there are at least USD 7 billion in USAFs in LAC that are not being used for the intended purpose of telecom projects. While there has been renewed interest in USAFs, we still lack precise data on the funds’ current status, how much money they have accumulated, and how the resources have or have not been used in recent years. In 2021, A4AI has taken a keen interest in USAFs and how they can be used to create more meaningful connectivity. Along with this report, we have published a discussion paper on USAFs and our latest instalment of the Affordability Report focused on USAFs.

What are the general trends when it comes to USAFs in Latin America?

Well, trends vary across the region, recent legal and regulatory reforms have been seen in several countries and they have been critical in allowing stakeholders, such as small and medium enterprises and community networks, who had previously been unable to access such funds to apply for USAFs. However, there are still countries that have either not used their funds in the past five years or have never used them at all, and this needs to be addressed.

Are there any success stories from this report?

Yes, some countries are promoting changes and this is good news! This means that not only large telcos, but also other complementary stakeholders such as SMEs and community networks, will be able to access USAFs. One success story can be found in Argentina, where the legal framework was modified and in October 2020, the national regulator granted licenses to two community networks.

What obstacles to progress do you see?

All stakeholders want to have a share of the resources, and USAFs are often used as a tool to balance a nation’s accounts. This situation has existed for many years and is difficult to change, especially given that countries are still struggling economically during the pandemic. The needed legal, policy, and regulatory changes take time and demand collective efforts.

What recommendations do you have for governments when it comes to the development and implementation of USAFs?

Governments must strengthen the management of their USAFs while also promoting legal and policy formulation and implementation efforts. Some of the key recommendations relate to increasing the USAFs’ disbursement rate and increasing their transparency. Complementary providers and stakeholders should be able to access the funds, which is a pending step in most countries examined in this report. 

The report was written by Nathalia Foditsch and Barbara Marchiori de Assis