_______________________Overview - USO

The Indian Telegraph Act 1885 (as amended in 2003 and 2006) defines Universal Service Obligation as access to telegraph service to people in rural and remote areas at affordable and reasonable prices. Apart from the higher capital cost of providing telecom services in rural and remote areas, these areas also generate lower revenue due to lower population density, low income and lack of commercial activity. Market forces alone would not direct the telecom sector to adequately serve backward and rural areas.


The New Telecom Policy - 1999 (NTP’99) envisaged creation of a Universal Service Obligation Fund to foster inclusive growth of telecom facilities for all and thus to fund the telecom schemes for Rural and Remote areas. It provided that the resources for meeting the Universal Service Obligation (USO) would be raised through a ‘Universal Access Levy (UAL)’, which would be a percentage of the revenue earned by the operators under various licenses. The Universal Service Support Policy came into effect from 01.04.2002. The Indian Telegraph (Amendment) Act, 2003 giving statutory status to the Universal Service Obligation Fund (USOF) was passed by both Houses of Parliament in December 2003. The Rules for administration of the Fund known as Indian Telegraph (Amendment) Rules, 2004 were notified on 26.03.2004. As per the Indian Telegraph Act 1885 (as amended in 2003, 2006 and 2008), the Fund is to be utilized exclusively for meeting the Universal Service Obligation.


Headed by an USO Fund Administrator, the USOF Fund Administration is an attached office of the Department of Telecommunications which formulate USOF projects under the various streams provided in the Indian Telegraph Rules, enter into implementation agreements with Telecom Service Providers (TSPs), monitor the implementation of USOF projects and disburse subsidy in accordance with terms and conditions of USOF agreements. For further details refer to www.usof.gov.in.

The USOF Administration is assisted by the Controller of Communication Accounts (CCA) Offices in discharge of its functions. These field units of the Department of Telecom (DOT) have been delegated with the functions of subsidy disbursement and verification of subsidy claims. They assist the USOF Administration in inspection and monitoring of the field level implementation of USOF Agreements. They also liaise with state and local government authorities in this regard. The Controller of Communication Accounts, Tamil Nadu is entrusted with these responsibilities for USO schemes to be implemented in the Tamil Nadu Service Area which includes the state of Tamil Nadu and UT of Puduchery and also for Andaman and Nicobar Islands.

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